Amazon.com Inc is reportedly in discussions to invest around $10 billion in ChatGPT-maker OpenAI, in a deal that could value the artificial intelligence company at more than $500 billion, according to a source familiar with the matter.
A Strategic Move in the AI Race
The talks between the two companies remain “very fluid,” the source said, requesting anonymity as the discussions are private. The potential deal underscores the growing competition among tech giants to secure computing power and dominance in artificial intelligence, as the race to develop systems that can match or surpass human capabilities accelerates.
Earlier this year, OpenAI struck several multi-billion-dollar partnerships with technology firms including Nvidia and Oracle. In November, the AI developer also agreed to a $38 billion deal to purchase cloud services from Amazon, further deepening their collaboration.
Balancing Growth and Investor Caution
Despite the sector’s rapid growth, investors are becoming cautious, watching closely for signs that demand for AI technology may be slowing or that the vast investments are not delivering the expected returns. The ongoing talks between Amazon and OpenAI come as the AI firm prepares for an initial public offering, which could value it at up to $1 trillion, Reuters reported in October.
The discussions highlight OpenAI’s growing ability to attract a range of partners since moving away from its non-profit structure and formalising its partnership with Microsoft. That arrangement transformed OpenAI into a public benefit corporation, enabling it to raise funds more freely while retaining its social mission.
Expanding Partnerships and Future Plans
Microsoft currently owns a 27% stake in OpenAI and holds exclusive rights to offer OpenAI models to its cloud customers. While OpenAI, Amazon and Microsoft have not yet commented publicly on the reported talks, The Information—first to report the negotiations—said OpenAI plans to use Amazon’s Trainium chips, which compete with those made by Nvidia and Google.
The report added that Amazon’s potential investment could pave the way for a larger fundraising round involving other investors. Additionally, OpenAI is reportedly considering selling an enterprise version of ChatGPT to Amazon, though it remains uncertain whether the deal will include integrating ChatGPT-powered shopping features into Amazon’s platforms.
(with inputs from Reuters)
