In a move that could reshape the artificial intelligence landscape, tech giant Amazon is reportedly in advanced talks to invest more than $10 billion (£7.5bn) in OpenAI, the startup behind the revolutionary ChatGPT.
A Colossal Valuation and Infrastructure Ambition
If the deal proceeds, it could propel OpenAI's market valuation to heights exceeding $500 billion, according to a report from The Information. This staggering figure underscores the immense financial scale of the AI arms race. The potential investment comes as OpenAI commits to an almost unfathomable $1.4 trillion in spending on AI compute infrastructure—the chips and servers powering its models—over the next eight years.
This colossal expenditure vastly outstrips the company's reported annual revenues of around $13 billion, explaining its urgent drive for fresh capital. To facilitate such funding, OpenAI has converted its core business into a for-profit corporation. Its longstanding principal backer, Microsoft, already holds an approximate 27% stake following a deal that also valued the firm at $500bn.
Strategic Partnerships and a Global Push
The Amazon talks are strategically significant. As the world's largest datacentre provider through Amazon Web Services (AWS), Amazon's investment would directly support OpenAI's enormous cloud computing bills. Last month, OpenAI committed to spending $38 billion on AWS capacity over seven years, with plans to utilise Amazon's proprietary Trainium chips, which compete with offerings from Nvidia and Google.
This is not OpenAI's only major infrastructure partnership this year. Oracle is spending $300 billion to construct new datacentres in the US, which OpenAI is expected to repay through usage fees. In a separate deal with chip leader Nvidia, OpenAI will pay cash for processors while Nvidia takes a non-controlling equity stake.
Leadership and Competition Heat Up
Amid this financial and strategic manoeuvring, OpenAI is also bolstering its global influence. The company recently announced the hiring of former UK Chancellor George Osborne to develop government relationships and broker national-level AI projects worldwide.
The competitive pressure is intense. OpenAI's chief executive, Sam Altman, has reportedly declared a "code red" alert for staff to mount a fightback against rivals, notably Google, whose updated Gemini AI tool is seen as a significant threat. The Amazon negotiations are said to include discussions about commercial opportunities, such as selling a corporate version of ChatGPT to the online retail behemoth.
Furthermore, OpenAI is considering an initial public offering (IPO) that, according to Reuters, could value the company at up to $1 trillion. Both OpenAI and Amazon have declined to comment on the ongoing investment talks.
