In a significant development for the tech industry, Amazon’s stock surged approximately 5% on Monday morning following the announcement of a monumental $38 billion deal with OpenAI. This partnership grants OpenAI access to hundreds of thousands of Nvidia’s AI chips through Amazon’s cloud computing platform, Amazon Web Services (AWS). Under the agreement, OpenAI will begin utilizing Nvidia’s GPUs located within Amazon’s AI servers for its AI workloads, with the partnership projected to scale to full computing capacity by the end of 2026.
This collaboration marks yet another strategic move by OpenAI, which has been actively securing deals with various cloud providers and chip manufacturers. Notably, the company has also inked a remarkable $300 billion agreement with Oracle, as well as sizeable contracts with AI data center provider CoreWeave amounting to over $22 billion. In recent months, OpenAI has continued to expand its collaborations, forming partnerships with Broadcom, AMD, and Nvidia.
However, the wave of AI-related partnerships has sparked concerns among market analysts regarding a potential bubble. Critics argue that the rapid growth in AI demand may be exaggerated, especially as OpenAI’s projected costs are expected to exceed $1 trillion by the end of the decade, while its revenue remains significantly lower. This disparity raises questions about the sustainability of OpenAI’s infrastructure investments.
Adding to the speculation surrounding OpenAI’s financial future, the company recently announced a deal with Microsoft that allows it to transition into a for-profit public benefit corporation. This move is paving the way for OpenAI’s anticipated IPO, which could value the company at approximately $1 trillion, as reported by Reuters.
On the Amazon front, the e-commerce giant recently released third-quarter earnings that exceeded analyst expectations, propelling its stock to new all-time highs. Furthermore, AWS announced that it has completed a substantial AI data center project and plans to supply OpenAI’s competitor, Anthropic, with one million custom AI chips by the close of 2025.
The ongoing developments exemplify the intense competition and investment in AI technology as leading companies vie for dominance in the rapidly evolving landscape. Investors will be keenly watching how these partnerships evolve and what implications they hold for the broader industry.
