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Amazon is reportedly in discussions to invest up to $50 billion in OpenAI, following significant job cuts across its operations. If the deal goes through, it would be one of the largest bets yet on the fast-growing AI company.
Sam Altman now appears increasingly attuned to the need for partnerships and capital-heavy alliances as competition from well-funded rivals like Meta accelerates.
OpenAI is looking to raise as much as $100 billion from investors in its latest funding round, which could value the company at around $830 billion. The organization is also seeking investment from Middle Eastern sovereign wealth funds and venture capital firms. Its current investors include Thrive Capital, Khosla Ventures, and the United Arab Emirates fund MGX.
Amazon CEO Andy Jassy is said to be leading the talks with OpenAI CEO Sam Altman, as reported by The Wall Street Journal. The details of any potential agreement are yet to be finalized; if Amazon invests tens of billions in OpenAI, it could become the largest contributor in the company’s ongoing fundraising round. Other big investors like SoftBank could offer up to $30 billion, as revealed in the same report.
CNBC reported, “The startup’s funding round could close in two parts, beginning with investments from strategics like Amazon, Microsoft, and Nvidia.”
Amazon has been increasing its investment in AI both to improve its services and for internal use. At the same time, the company has been cutting costs, including job reductions.
The retail giant has invested billions into its artificial intelligence and cloud operations. Additionally, the organization has committed to spending over $100 billion on capital investments, much of it dedicated to designing next-generation data centres that support AI infrastructure for internal use and enterprise clients.
Amazon has not put all its AI bets in one place. The company invested in Anthropic, one of OpenAI’s main rivals. By late 2024, Amazon had poured around $8 billion into the startup and still counts it as a key cloud customer, building an $11 billion data centre campus in Indiana to support Anthropic’s computing needs. The tech giant is also focused on building its own silicone, Tranium.
CEO Andy Jassy, who succeeded Jeff Bezos in 2021, has made it clear that this new era will be defined by AI, and some employees will be affected during this transition.
Founded in 2015, OpenAI has spent billions to support the massive computing power needed for its AI models and to hire top researchers. OpenAI recently started showing ads as a new way to generate revenue.
A partnership with Amazon would strengthen the companies’ existing relationship. OpenAI has relied heavily on Microsoft for computing power, but recently signed a deal to buy $38 billion in cloud services from Amazon Web Services.
Amazon's investment could depend on separate negotiations, including a possible expansion of OpenAI's cloud server rental deal with Amazon and a commercial agreement for OpenAI to sell its products, such as enterprise ChatGPT subscriptions, to Amazon, according to the reports.
As AI development becomes more resource-intensive, Altman’s openness to strategic partnerships may signal a pragmatic evolution rather than a departure from OpenAI’s original vision.
