OpenAI is reportedly in talks with Amazon for a massive investment that could top $10 billion. And then this news comes just weeks after the two companies signed a separate 38 billion cloud infrastructure deal, signaling a major shift in the AI power balance.
The thing is, OpenAI is moving fast to break its total reliance on Microsoft and Nvidia. This potential deal would see the ChatGPT maker adopting Amazon’s own Trainium AI chips to power its models.
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The “Compute” Arms Race
OpenAI’s hunger for processing power is basically bottomless. Here’s the kicker: after a massive corporate restructuring in October, OpenAI is finally free to partner with whoever they want.
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The Deal: Amazon is looking to inject upwards of $10 billion into OpenAI.
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The Chips: In exchange, OpenAI would commit to using Amazon’s Trainium series chips. These are home-grown alternatives to Nvidia’s hyper-expensive GPUs.
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The Valuation: If this goes through, it could push OpenAI’s valuation north of 500 billion, and some analysts think an IPO could see it hitting 1 trillion by next year.
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Diversifying the Portfolio
Microsoft has already dumped 13 billion into OpenAI since 2019, but they no longer have “first dibs” on being the sole provider of computing power.
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AWS Strategy: Amazon already has a massive 8 billion stake in OpenAI’s rival, Anthropic. Investing in OpenAI too is a classic “hedge your bets” move to ensure AWS remains the backbone of the entire AI industry.
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Nvidia Alternative: Using Trainium chips is about more than just money; it’s about survival. Global chip supplies are tight, and having a direct line to Amazon’s hardware reduces the risk of OpenAI getting throttled by a lack of Nvidia parts.
Let’s be real—we’re seeing a “circular” money flow where big tech companies invest billions into AI startups just so those startups can turn around and spend that same money on the investor’s cloud servers. It’s an ongoing, high-stakes game where the only thing bigger than the chips is the ego behind the deals.
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