(RTTNews) – OpenAI is reportedly in discussions with Amazon over a potential investment and an agreement to utilize the company’s artificial intelligence chips, according to a report from CNBC. Anonymous sources indicated that the negotiations are ongoing and may evolve, with the investment possibly exceeding $10 billion. The information was first disclosed by The Information.
The talks come on the heels of OpenAI’s restructuring completed in October, which established clearer terms for its partnership with Microsoft and provided the AI firm with increased flexibility to raise capital and engage with a broader spectrum of partners within the AI ecosystem. Previously, Microsoft had invested over $13 billion in OpenAI since 2019, but under the new structure, it no longer holds the right of first refusal to act as OpenAI’s exclusive compute provider. This shift enables OpenAI to develop certain products alongside third-party partners.
Amazon’s commitment to the AI sector is underscored by its prior investment of at least $8 billion in Anthropic, a significant competitor to OpenAI. The current discussions suggest that Amazon is looking to deepen its involvement in the rapidly growing generative AI market. Other industry players have made similar strategic moves, with Microsoft recently announcing plans to invest up to $5 billion in Anthropic and Nvidia committing up to $10 billion.
Amazon Web Services (AWS) has been developing its own AI chips for nearly a decade, positioning these offerings as essential for AI model training and inference. AWS introduced its Inferentia chips in 2018 and recently introduced the latest version of its Trainium chips earlier this month, further solidifying its presence in the AI hardware market.
In recent months, OpenAI has made significant infrastructure commitments, establishing partnerships with Nvidia, AMD, and Broadcom, while securing substantial computing capacity. Notably, last month, OpenAI agreed to purchase $38 billion worth of capacity from AWS, marking its first major contract with the cloud services provider.
In a separate financial maneuver, OpenAI completed a $6.6 billion secondary share sale in October, enabling current and former employees to offload shares at a valuation of roughly $500 billion.
As of the close of trading on Wednesday, Amazon’s stock was priced at $221.27, down 0.58% for the day, and was trading after hours at $221.76, reflecting an increase of 0.22% on the NasdaqGS.
The evolving dynamics between OpenAI, Amazon, and other major tech players signal a rapidly changing landscape in the AI industry, where collaboration and competition are increasingly intertwined. As these discussions progress, they may reshape partnerships and investment strategies within the sector, underscoring the burgeoning demand for AI capabilities across various applications.
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