NewzVille Business Desk
OpenAI has signed $38 billion deal with Amazon.com for seven years to purchase cloud services, marking its first major step to boost AI ambitions after a recent restructuring that granted the ChatGPT maker greater operational and financial freedom.
Under the agreement, OpenAI will have access to hundreds of thousands of advanced NVIDIA GPUs and the ability to scale up to tens of millions of CPUs through AWS infrastructure.
The deal signals a shift from relying solely on Microsoft’s Azure to broader cloud partnerships, allowing OpenAI to focus on developing AI models and services without building massive in-house data centers.
For Amazon, the contract is a strong endorsement of AWS’s ability to handle large-scale AI workloads, providing a long-term, high-value revenue stream and justifying significant infrastructure investments.
It also allows AWS to build large clusters, benefit from scale, and spread infrastructure costs, while enhancing its brand and competitive position.
With secure access to large-scale infrastructure, OpenAI can accelerate the development of large AI models, fueling competition among AWS, Microsoft, Google, and others. This rivalry could lead to better services, lower costs, and more innovation for end-users.
Following the announcement, Amazon shares hit an all-time high on Monday, potentially adding nearly $140 billion to its market value, while Microsoft shares dipped briefly.
