The announcement comes less than a week after Amazon laid off 14,000 people.
OpenAI has signed a new $38bn deal with Amazon that will allow the artificial intelligence company to run AI workloads on the Amazon Web Services (AWS) cloud infrastructure.
The seven-year deal announced Monday is the first major AI push for the e-commerce giant since a restructuring last week.
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The new deal will give the ChatGPT maker access to thousands of Nvidia graphics processors to train and run artificial intelligence models.
Experts say that doesn’t mean it will allow OpenAI to train its models on websites hosted by AWS — including the New York Times, Reddit and United Airlines.
“Running OpenAI training in AWS doesn’t change their ability to scrape content from AWS-hosted websites (which they could already do for anything publicly readable). It’s strictly speaking to the economics of rent and purchase for GPU (graphics processing unit) capacity,” said Joshua McEntee, CEO of AI detection company Al Jazeera.
The deal is also a major vote of confidence for the e-commerce giant’s cloud unit, AWS, which some investors had feared would fall behind rivals Microsoft and Google in the artificial intelligence (AI) race. These fears were somewhat eased by the strong growth reported by the business in the September quarter.
OpenAI will start Using AWS immediately with all capacity planned to come online by the end of 2026 and room for further expansion in 2027 and beyond.
Amazon plans to deploy hundreds of thousands of chips with Nvidia’s GB200 and GB300 AI accelerators in data clusters designed to power ChatGPT’s responses and train OpenAI’s next model, the companies said.
Amazon already offers the OpenAI model on Amazon Bedrock, which offers multiple AI models for businesses using AWS.
OpenAI’s sweeping restructuring last week stripped it of its nonprofit roots and removed Microsoft’s first right of refusal to provide services under the new arrangement.
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Amazon’s announcement about investing in AI comes days after the company cut 14,000 jobs Despite the people CEO Andy Jassey commented in an earnings call on Thursday that the layoffs were not driven by AI.
“The announcement we made a few days ago wasn’t really financially driven, and it’s not really AI-driven, at least not right now,” Jassi said.
OpenAI CEO Sam Altman said the startup has committed to spending $1.4 trillion to develop 30 gigawatts of computing resources — enough to power roughly 25 million United States homes.
“Scaling frontier AI requires massive, reliable computation,” Altman said. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”
This comes amid growing concerns over the energy demands required to operate AI data centers. Lawrence Berkeley National Laboratory estimates that AI data centers will consume 12 percent of US electricity by 2028.
An AP/NORC poll from October found that 41 percent of Americans are extremely concerned about AI’s impact on the environment, while another 30 percent say they are somewhat concerned as the industry expands its data center footprint around the US.
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The inflated valuations of AI companies and their massive spending commitments for OpenAI, totaling more than $1 trillion, have fueled fears that the AI boom is turning into a bubble.
As Reuters reported in June, OpenAI has already tapped Alphabet’s Google to provide cloud services. The deal is also purported to buy $300 billion in computing power over five years.
OpenAI’s relationship with Microsoft, which the two forged in 2019, has helped propel Microsoft to the top of its big tech peers in the AI race, with both companies recently making moves to reduce their dependence on each other.
Neither OpenAI nor Amazon were immediately available for comment.
On Wall Street, Amazon stock is rising on news of a new deal. By 11:15 a.m. (16:15 GMT) in New York, it was up 4.7 percent.