Amazon in Talks to Invest $10 Billion in OpenAI

Amazon is in discussions to invest roughly $10 billion in OpenAI, the company behind ChatGPT, in a deal that could value the artificial intelligence firm at over $500 billion, a source familiar with the matter said on Tuesday.

The talks are described as “very fluid,” and no final decision has been made.

The potential investment comes as competition within the tech industry increases over AI computing power. OpenAI has already signed multi-billion-dollar agreements with Nvidia, Oracle, and Microsoft, as well as a $38-billion cloud services deal with Amazon in November.

“OpenAI plans to use Amazon’s Trainium chips,” The Information reported, which compete with Nvidia and Google’s chips. The report also revealed that Amazon’s funding could lead to a fundraising round with other investors.

OpenAI is exploring selling an enterprise version of ChatGPT to Amazon, though it is murky if this would include integration with Amazon’s own shopping features.

The talks stress OpenAI’s transition from its non-profit roots. The company restructured in 2023 as a public benefit corporation controlled by a non-profit with a financial stake, removing limitations to raising capital and securing computing resources. Microsoft now holds a 27% stake in OpenAI and has exclusive rights to sell its models to Azure customers.

OpenAI is also preparing for an initial public offering in 2026 that could value the company at up to $1 trillion, Reuters reported in October, potentially making it one of the largest tech listings ever.

Reports say an Amazon investment could complicate the current Microsoft arrangement and may lead to multi-cloud distribution of OpenAI models.

Despite the surge in AI investment, investors are being careful. The global AI market is expected to surpass $300 billion annually by 2027, but profitability and the sustainability of massive infrastructure spending are still concerns.

OpenAI, Amazon, and Microsoft did not respond to requests for comment.