Amazon and OpenAI Hold Talks on Potential $10bn-Plus Investment

Investment Tied Closely To Cloud Capacity

Amazon, best known globally as an e-commerce platform, is also the world’s largest provider of data centre capacity through Amazon Web Services. Any investment in OpenAI would help fund the AI company’s rapidly growing demand for compute.

OpenAI said last month that it plans to spend around $38bn over seven years on cloud capacity from Amazon Web Services.

The Information also reported that OpenAI intends to use Amazon’s Trainium chips, which compete with processors developed by Nvidia and Google. Amazon’s financing could lead to a broader funding round involving additional investors.

Compute Costs Outpace Revenues

OpenAI’s long-term spending plans highlight the scale of investment required to operate large AI models. The company’s projected spend on chips and servers totals about $1.4tn over the next eight years, far exceeding its reported annual revenues of roughly $13bn. OpenAI remains loss-making and has been actively seeking new funding.

The company has converted its core business into a for-profit structure. Its largest long-term backer, Microsoft, holds a stake of about 27% following a deal that valued OpenAI at around $500bn.

Competition And Commercial Use

OpenAI is also facing intensifying competition, particularly from Google, whose recent updates to its Gemini AI model have put pressure on rivals. Chief executive Sam Altman has reportedly issued a “code red” internally in response.

Talks with Amazon are said to include potential commercial arrangements, including the sale of an enterprise version of ChatGPT to the retailer. Neither OpenAI nor Amazon has commented publicly on the discussions.