Amazon Bets Big on Agentic AI Development With $50 Billion OpenAI Investment
Amazon is closing a gap in its AI offerings to enterprise developers with a $50 billion investment into ChatGPT maker OpenAI.
The commitment includes a $15 billion Series C investment Amazon will fund on March 31 and an additional $35 billion that will fund either when OpenAI is publicly listed or when OpenAI meets a set of specific milestones, with a deadline of December 31, 2028. The investment comes as part of a financing round that also includes $30 billion from Nvidia and $30 billion from Softbank, raising OpenAI’s total valuation to $840 billion.
The strategic partnership with Amazon also commits OpenAI to expand its $38 billion agreement with Amazon Web Services by $100 billion over eight years to consume about two gigawatts of Trainium processor capacity through AWS cloud infrastructure. Trainium is purpose-built silicon made for efficient AI training and inference workloads. OpenAI will have access to the current generation and next generation of chip to run its training and inference workloads on AWS.
Amazon is selling its Trainium processors almost as fast as it can build them, said Brad Bonnett, vice-president and technical advisor at Amazon Web Services. “From a chip perspective, to add diversity in a large way with another frontier model provider and to show the market and other customers that not only Anthropic – who’s been a big speaking point to this – but also OpenAI, the other leader in the space, is choosing Amazon for this and we think it’s a good point to show the type of customers that are using Trainium.”
Anthropic committed to using AWS Trainium and Inferentia chips to build, train, and deploy its models as part of a 2024 partnership announcement with Amazon. Amazon has invested a total of $8 billion in Anthropic, the developer of Claude large language models (LLMs).
The new deal with OpenAI will also see GPT models and other OpenAI models become available on Amazon Bedrock. As of February 27, OpenAI’s GPT OSS Safeguard 120B and GPT OSS Safeguard 20B joined a long list of models available to developers there, including those from Anthropic, Mistral, Google, Cohere, DeepSeek, Quen, Meta, and Amazon.
OpenAI and AWS will collaborate to develop customized models that could power Amazon’s customer-facing applications as well. In a call with analysts, Bonnet pointed to Amazon Quick, Amazon Connect, Amazon Alexa, and Amazon.com’s Rufus AI assistant as examples of end-user applications where the models could be put to work.
Amazon says OpenAI’s stateful runtime environment will be available through Bedrock in the coming months.
Our Take
Amazon is carving out its AI strategy for developers with this exclusive deal with Claude. It differentiates Amazon’s focus from that of Microsoft, which has its own long-held exclusive deal with OpenAI.
Microsoft’s exclusive deal with OpenAI allows it to own stateless access to models through API calls facilitated through Azure. Amazon is positioning itself to be the only provider outside of OpenAI to offer a stateful runtime environment. This allows developers to build agents that hold memory and maintain context as they complete multi-step tasks.
In a joint statement also released February 27, OpenAI and Microsoft say Microsoft maintains its exclusive license to access intellectual property across OpenAI models and products. The revenue share agreement is unchanged and includes sharing revenue from partnerships between OpenAI and other cloud providers. Microsoft Azure also remains in place as the first-party host of OpenAI Frontier.
There’s overlap in functionality between Amazon Bedrock and OpenAI Frontier on AWS, which both offer stateful developer environments to build AI agents. Bonnett acknowledged that overlap in response to a question from Info-Tech. “This is not a new space for us in terms of having some overlap in terms of features and functionality, and we want to make sure we’re competing on a level playing field and giving customers the option.”
The deal may add to concerns about the circular nature of investments among different players in the AI ecosystem, as the $50 billion investment comes with a requirement to spend $100 billion on AWS infrastructure capacity over the next eight years.
The partnership between OpenAI and Amazon became possible after a new deal with Microsoft that freed OpenAI to collaborate with other cloud platforms, while also committing to spend $250 billion on future Azure consumption.