Amazon’s $50B stake in OpenAI could boost its AI, cloud businesses
Amazon on friday explained The strategic partnership with OpenAI, which includes investment of up to $50 billion, is 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 for its new enterprise platform, called Frontier, including a commitment to deploy 2 gigawatts of the company’s Trainium AI chips.
“We have two of the largest AI labs today, both of which are significantly invested in Trainium,” Amazon CEO Andy Jassy told CNBC’s Andrew Ross Sorkin on Friday.
The deal marks a significant shift for Amazon, which has built a strong relationship with OpenAI’s primary rival, Anthropic.
Amazon has pumped billions of dollars into Anthropic since 2023, building an $11 billion data center campus for the company in Indiana called Project Rainier.
The company also relies in part on Anthropic’s Claude models for some of its AI products, including shopping assistant Rufus and Alexa+, a revamped version of its digital assistant.
Jassy told CNBC on Friday that the OpenAI deal does not change its relationship with Anthropic.
“[Anthropic has] “We’ve always had multiple partners, and so have we,” said Jassy. “And so that relationship will remain strong, and we’re really excited about our partnership with OpenAI over a long period of time.”
Amazon and OpenAI also agreed to jointly develop “customized models” for Amazon’s engineering teams to power consumer products.
OpenAI will spend $100 billion on AWS over the next eight years, an expansion of its existing $38 billion deal signed last November.
The partnership was announced alongside OpenAI’s broader $110 billion funding round, $30 billion from Nvidia and $30 billion from Nvidia. SoftBank.
The deal continues a trend of diversification beyond its longstanding partnership with OpenAI MicrosoftAmazon’s biggest cloud computing rival. Microsoft first backed OpenAI in 2019, committing to invest more than $13 billion in the initiative. Microsoft also invested $5 billion in Anthropic last November.
One 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 have always been considered within our agreements, and Microsoft is excited to see what they can create together.”
details
Amazon’s massive investment in OpenAI has some conditions. Amazon will start with an initial $15 billion commitment, followed by a $35 billion commitment “in the coming months,” the companies said.
The second tranche is contingent on OpenAI reaching certain unspecified milestones, as well as the company completing its “initial public offering or direct listing of equity securities” in the United States. regulatory filing.
The application states that if Amazon does not invest $35 billion by December 31, 2028, the parties’ obligations under the agreement will end.
One turning point may be that OpenAI needs to achieve artificial general intelligence before it can get $35 billion from Amazon. Information he reported earlier this week, quoting people familiar with the matter. Amazon declined to comment on the report.
AGI refers to artificial intelligence that can perform as well as or better than humans on most tasks.
The strategic partnership represents a major win for AWS, which competes with Microsoft. Google And Seer For highly lucrative AI deals for cloud services.
This could also help ease Wall Street’s concerns about this year’s $200 billion investment spending forecast. The bulk of its spending is expected to go to AI-related initiatives, including data centers, chips and networking equipment.
Amazon shares fell for nine days following its Feb. 5 earnings report, reducing its market value by more than $450 billion. The stock closed up 1% on Friday.
With the OpenAI deal, “the bear thesis continues to erode” as AWS now has major partnerships with two leading AI labs, both of which use its own custom silicon, William Blair analysts wrote in a note on Friday.
“This puts last quarter’s $200 billion capital spending announcement into context, as AWS rapidly expands to support this new major customer in addition to expanding with Anthropic and others,” analysts wrote. “This likely means more AWS growth momentum is coming.”
Andrew Graham, managing partner of asset management firm Jackson Square Capital, told CNBC in an email that the Trainium commitment “shows that Amazon is becoming a larger player in the custom silicon space.”
It puts Amazon in “direct competition” with other custom silicon makers broadcom Graham added that this situation could threaten Nvidia’s chip dominance.
AI support
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 a head start.
The company launched its own base models, called Nova, in December 2024.
On Tuesday, David Luan, head of Amazon’s AGI lab in San Francisco, announced he was leaving the company. The AGI lab will now report to DeSantis.
For Amazon, access to OpenAI models will accelerate its artificial intelligence efforts. This could also mean more collaboration between the two companies in the future, particularly on brokered trading, which is emerging as the latest frontier of potential AI disruption.
While other companies like Walmart, Etsy And Shopify While they announced shopping partnerships with OpenAI and other AI platforms, Amazon 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.
But in recent months, Jassy has signaled that Amazon may welcome some third-party intermediaries into its site or integrate its tools with artificial intelligence companies.
“Together, we should try to find a better customer experience and a meaningful exchange of value for both parties,” Jassy said during Amazon’s recent earnings conference call. “But I’m very hopeful that over time we’ll get there. We continue to have a series of discussions.”
— CNBC’s Ashley Capoot contributed to this article.
