Amazon on Friday unveiled a strategic partnership with OpenAI that includes an investment of up to $50 billion, the latest sign of deepening ties between the tech giant and the maker of ChatGPT.
As part of the deal, OpenAI will use more Amazon Web Services infrastructure, including a commitment to deploy 2 gigawatts of the company’s Trainium artificial intelligence chips for its new enterprise platform, called Frontier.
“Today, we now have the two largest AI labs who are both significantly betting on Trainium,” Amazon CEO Andy Jassy told CNBC’s Andrew Ross Sorkin on Friday.
The pact marks a significant shift for Amazon, which has forged a strong relationship with OpenAI’s primary rival, Anthropic.
Amazon has pumped billions of dollars into Anthropic since 2023, and put up an $11 billion data center campus for the company in Indiana called Project Rainier.
The company also partly relies on Anthropic’s Claude models for some of its AI products, including shopping aide Rufus, and Alexa+, a revamped version of its digital assistant.
Jassy told CNBC Friday that the OpenAI deal doesn’t change its relationship with Anthropic.
“[Anthropic has] always had multiple partners, and we do too,” Jassy said. “And so that relationship will stay strong, and we’re really excited about the partnership we’re building over a long period of time with OpenAI.”
Amazon and OpenAI also agreed to jointly develop “customized models” for Amazon’s engineering teams to power its consumer products.
OpenAI will spend $100 billion on AWS over the next eight years, an expansion of its existing $38 billion agreement signed last November.
The partnership was announced in tandem with OpenAI’s broader $110 billion funding round, which also includes $30 billion from Nvidia and $30 billion from SoftBank.
The deal continues a trend of OpenAI diversifying beyond its longstanding partnership with Microsoft, Amazon’s top cloud computing rival. Microsoft first backed OpenAI in 2019, and has committed to invest more than $13 billion in the startup. Microsoft also invested $5 billion in Anthropic last November.
In a joint statement on Friday, OpenAI and Microsoft said their partnership remains “strong and central.”
“Microsoft maintains its exclusive license and access to intellectual property across OpenAI models and products,” the companies wrote. “Collaborations like the partnership between OpenAI and Amazon were always contemplated under our agreements and Microsoft is excited to see what they build together.”
The details
Amazon’s massive investment in OpenAI has some conditions. The companies said Amazon will start with an initial commitment of $15 billion, followed by another $35 billion “in the coming months.”
The second tranche is contingent upon OpenAI hitting certain unspecified milestones, as well as the company completing “an initial public offering or direct listing of equity securities” in the U.S., according to a regulatory filing.
The parties’ obligations under the agreement will terminate if Amazon hasn’t invested $35 billion by Dec. 31, 2028, “which date may accelerate under certain circumstances,” the filing states.
One of the milestones may be that OpenAI must reach artificial general intelligence in order for it to receive the $35 billion from Amazon, The Information reported earlier this week, citing people familiar with the matter.
AGI refers to AI that can perform as well or better than humans on most tasks.
The strategic partnership represents a major win for AWS, which is competing with Microsoft, Google and Oracle for highly lucrative AI deals for cloud services.
It also may help ease Wall Street’s concerns around its hefty $200 billion capex forecast this year. The bulk of its spending is expected to go to AI-related initiatives, including data centers, chips and networking equipment.
Amazon shares sank for nine days straight following its Feb. 5 earnings report, shaving more than $450 billion off its market value. The stock closed 1% higher on Friday.
William Blair analysts wrote in a Friday note that with the OpenAI deal, the “bear thesis continues to erode” as AWS now has major partnerships with two of the leading AI labs and both are using its custom silicon.
“This puts last quarter’s $200 billion capex announcement into context, as AWS rapidly expands to support this new big customer, in addition to expanding with Anthropic and others,” the analysts wrote. “This likely means more AWS growth acceleration is on the come.”
Andrew Graham, managing partner at asset management firm Jackson Square Capital, told CNBC in an email that the Trainium commitment “demonstrates Amazon becoming a larger player in the custom silicon space.”
It puts Amazon in “direct competition” with other custom silicon makers like Broadcom and Google, and could threaten Nvidia’s chip dominance, Graham added.
An AI boost
Amazon has struggled to compete in the increasingly crowded market for AI consumer and business applications, where others like Google, Anthropic, OpenAI and Microsoft have had a head start.
The company released its own foundation models, called Nova, in December 2024.
Late last year, Amazon reorganized its artificial general intelligence organization to be led by veteran cloud executive Peter DeSantis, who replaced Rohit Prasad. As part of the overhaul, Amazon also brought its chipmaking and quantum computing research units under DeSantis’ organization. The AGI unit oversees Nova development, among other initiatives.
On Tuesday, the head of Amazon’s AGI lab in San Francisco, David Luan, announced he was leaving the company. The AGI lab will now report to DeSantis.
For Amazon, gaining access to OpenAI’s models will provide a boost to its AI efforts. It could also spell further collaboration between the two companies in the future, particularly around agentic commerce, which has emerged as the latest frontier for potential AI disruption.
While other companies like Walmart, Etsy and Shopify have announced shopping partnerships with OpenAI and other AI platforms, Amazon has remained on the sidelines. The company has blocked dozens of agents from accessing its site, including OpenAI’s ChatGPT, while investing in tools like Rufus.
In recent months, however, Jassy has signaled Amazon may welcome some third-party agents onto its site or integrate its tools with AI companies.
“We have to try to find a customer experience together that’s better, and a value exchange that makes sense for both parties,” Jassy said during Amazon’s latest earnings conference call. “But I’m very hopeful that we’ll get there over time. We continue to have a number of conversations.”
— CNBC’s Ashley Capoot contributed reporting to this article.
