OpenAI, the start-up behind the popular AI tool ChatGPT, has signed a significant contract worth $38 billion with Amazon Web Services (AWS). This deal provides OpenAI with access to Amazon’s immense cloud computing network. It’s symbolic of an important move, as the company continues to expand its AI portfolio. The seven-year contract strengthens OpenAI’s hand to use Nvidia graphics processors. These processors happen to be the same technology that powers the training of OpenAI’s cutting-edge AI models.
The news arrives as OpenAI is looking to bolster its computing power following a year of dependence on Microsoft. Over recent years, the company has engaged in various partnerships, securing deals exceeding $1 trillion with tech giants including Oracle, Broadcom, AMD, and Nvidia. This new agreement with Amazon is different. It follows the company’s decision to loosen its exclusive cloud partnership, which had been in place until this past January.
This sentiment was echoed by OpenAI co-founder and CEO Sam Altman, who said that in order to advance in AI development, strong computational resources are critical.
“Scaling frontier AI requires massive, reliable compute.” – Sam Altman
This partnership is a sign of OpenAI’s recent inclination to form huge partnerships. We think that much is clear since OpenAI first released ChatGPT to the world in late 2022, thrusting AI technology and its profound capabilities into the consumer mainstream. The time requirement for enhanced computing capabilities is immediate. This is all happening against the backdrop of OpenAI’s actual loss — disclosed in Microsoft’s most recent financial results — being an astounding $12 billion last quarter.
Amazon’s stock has climbed to an all-time high since. That increase came right after news of one big deal. The partnership not only bolsters OpenAI’s infrastructure but has added an impressive $140 billion to Amazon’s overall valuation.
Matt Garman, CEO of AWS, characterized the partnership as a “game-changer” for both companies.
“Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.” – Matt Garman
Artificial intelligence is a field changing very quickly. OpenAI is shoring up its own computing bets. Smartly, OpenAI is diversifying its computing partnerships, ahead of a major tech industry pivot toward reliable, powerful computational resources. Even some of the industry’s biggest leaders, such as Jamie Dimon, are warning about what could be coming stormy waters. The push for AI innovation remains powerful.