Amazon is in early discussions to invest as much as $10 billion in OpenAI. According to reports, this deal would see the AI lab using Amazon’s AI chips. If it materializes, the agreement would value OpenAI at more than $500 billion.
Amazon has been looking to diversify its bets in the competitive AI field. The company has already partnered with and invested $8 billion in Anthropic, a rival to OpenAI. Earlier this month, Amazon also unveiled the latest iteration in its Trainium series of chips and outlined plans for the next installment, complementing its cloud computing offerings through Amazon Web Services.
This potential investment news follows OpenAI’s recent completion of its transition to a for-profit model. This shift gives OpenAI more freedom to strike deals with investors beyond Microsoft, one of its earliest backers which holds a 27% stake.
An Amazon investment in OpenAI would represent the latest in a series of circular deals within the AI industry. In these arrangements, major hardware manufacturers and cloud providers strike deals with emerging AI companies. The AI firms then commit to using the providers’ data centers and chips for training their models.
This pattern is evident in OpenAI’s recent activities. In March, OpenAI invested $350 million of equity into CoreWeave, which used the funds to buy chips from its backer Nvidia. Those same chips provide computing power to OpenAI, increasing CoreWeave’s revenue and making OpenAI’s stake more valuable.
Then in October, OpenAI signed a deal to acquire a 10% stake in AMD and committed to using that chipmaker’s AI GPUs. It also signed a chip usage agreement with Broadcom that same month. In November, the maker of ChatGPT signed a separate $38 billion cloud computing deal with Amazon.
OpenAI and Amazon did not immediately respond to requests for comment regarding the reported investment talks.