OpenAI has locked in a seven-year, $38 billion deal with Amazon to tap its cloud infrastructure, securing hundreds of thousands of Nvidia chips and marking a major step away from its heavy reliance on Microsoft.
The agreement, revealed Monday, lets OpenAI start using Amazon Web Services right away, with full rollout by late 2026 and options to scale further. It follows last week’s restructuring that stripped Microsoft of exclusive compute rights, freeing OpenAI to court multiple providers.
CEO Sam Altman called the partnership essential for pushing AI boundaries. “Scaling frontier AI requires massive, reliable compute,” he said. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”
The move underscores the breakneck pace of AI hardware demands. OpenAI aims to spend $1.4 trillion building 30 gigawatts of capacity—enough to power roughly 25 million homes—while Amazon, Microsoft, Google, and Meta collectively target $420 billion in capital outlays next year.
For Amazon, the deal is a coup for AWS, which has trailed rivals in AI perception. Shares soared to a record high Monday, tacking on nearly $140 billion in market value after a 10% Friday jump. Analyst Paolo Pescatore of PP Foresight hailed it as “a hugely significant deal” and proof of AWS’s ability to handle massive scale.
OpenAI has also secured $300 billion from Oracle, cloud access from Google, and chip supply deals with Nvidia, AMD, and Broadcom. It reaffirmed a $250 billion Azure commitment to Microsoft last week.
Despite a projected $20 billion revenue run rate by year-end, OpenAI remains deep in the red, fueling Wall Street skepticism about funding such commitments. The overhaul clears a path for a potential $1 trillion IPO.
As AI infrastructure costs skyrocket, the sector’s long-term viability hangs on delivering tangible value—lest the boom turn bust.
