Amazon is navigating a substantial strategic shift, balancing aggressive investments in artificial intelligence with a withdrawal from certain physical retail operations. This dual approach is underscored by reports of a potential multi-billion dollar stake in OpenAI alongside the closure of numerous Amazon Fresh and Amazon Go stores.
As the company pivots toward its technological future, it is simultaneously scaling back its brick-and-mortar presence. A report from GeekWire indicated that Amazon is shutting down all of its Fresh and Go locations in specific regions. The closures, which resulted in long lines for 50%-off clearance sales in Seattle, were attributed to an absence of a “unique customer experience” and an unprofitable business model.
This retail contraction is part of a broader restructuring effort that includes a workforce reduction of 16,000 positions. Amazon’s grocery segment is now honing its focus on its Fresh delivery service and the expansion of Whole Foods Market. In a related development, Reuters reported that Saks has ended its e-commerce partnership with Amazon, further indicating a realignment of the retail giant’s strategic partnerships.
Amazon is also reportedly in advanced negotiations to participate in a funding round for OpenAI, as per The Wall Street Journal and CNBC. This deal could value the AI developer at approximately $830 billion. Notably, Amazon may contribute to this investment using its own AI chips—Trainium and Inferentia—and expand cloud capacity through Amazon Web Services (AWS). This “chips-for-equity” model emphasizes the strategic underpinnings of the potential agreement.
Discussions regarding the investment are being spearheaded by Amazon CEO Andy Jassy and OpenAI’s Sam Altman. Other potential investors include Nvidia, which is reportedly considering an investment of up to $30 billion, and SoftBank, which is also evaluating a commitment. This potential investment represents a new phase in Amazon’s aggressive AI strategy, building on a cloud agreement with OpenAI established in November 2025.
On the market front, Amazon’s shares closed at $239.30 on Friday, reflecting a decline of 1.01 percent. Despite these daily losses, analyst sentiment remains favorable. RBC Capital Markets maintains an “Outperform” rating with a price target of $300, while JPMorgan‘s target stands at $305.
Investors are now looking ahead to the upcoming quarterly earnings report scheduled for February 5th. This update is anticipated to provide clarity on the scale of the proposed OpenAI investment as well as the financial implications of the retail restructuring. The critical question for the market is whether Amazon can successfully navigate the dual challenge of ambitious AI expansion while implementing stringent cost-control measures.
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