AMAZON
Cloud alliances are shifting, and OpenAI is steering the wheel
OpenAI has signed a $38 billion deal with Amazon Web Services (AWS) to secure large amounts of computing power.
This is OpenAI’s first major contract with AWS and shows the company is no longer relying mainly on Microsoft.
OpenAI will start using AWS immediately, with access to large numbers of Nvidia chips. Amazon plans to expand capacity further over time.
OpenAI once had Microsoft as its exclusive cloud partner after Microsoft invested around $13 billion.
That arrangement recently ended, giving OpenAI freedom to work with other cloud providers.
The company still expects to spend an extra $250 billion on Microsoft Azure.
OpenAI has also signed cloud deals with Oracle and Google, but AWS is the biggest provider in the market.
This deal will support both real-time AI (such as ChatGPT replies) and training future models.
Everyone wants a piece
It focuses on Nvidia hardware for now, though other chips could be added in future. Companies like Peloton, Thomson Reuters and Comscore already use OpenAI models through AWS.
The move is notable because Amazon has also heavily backed Anthropic, a key OpenAI rival.
Key points
OpenAI signs $38 bn AWS deal for large-scale Nvidia compute
Microsoft remains a major partner, but not exclusive
Move helps OpenAI scale and plan for a future IPO
By spreading its partnerships across multiple cloud companies, OpenAI is strengthening its long-term strategy and securing the resources it needs.
Leaders at the company have said that an IPO is likely in the future, as OpenAI continues to scale its operations and needs more capital.
Another day, another billion dollars. - MV