OpenAI has signed a landmark seven-year, $38 billion agreement with Amazon to purchase cloud computing services, marking its first major strategic move since last week’s internal restructuring that granted the ChatGPT developer greater financial and operational independence.
Announced on Monday, the deal gives OpenAI access to hundreds of thousands of Nvidia graphics processors hosted by Amazon Web Services (AWS), which will be used to train and operate the company’s advanced artificial intelligence models.
The agreement underscores the AI industry’s growing appetite for computing power as technology firms race to build systems that can rival or even surpass human intelligence.
OpenAI CEO Sam Altman said the company is committed to investing $1.4 trillion to develop 30 gigawatts of computing resources, enough to power nearly 25 million US homes.
The deal also represents a major vote of confidence in Amazon’s cloud division, AWS, which some investors had feared was falling behind competitors like Microsoft Azure and Google Cloud in the AI race. These concerns have eased following Amazon’s strong performance in the quarter ending in September.
Amazon’s stock hit an all-time high on Monday, adding nearly $140 billion to its market value. Shares surged 5% in the latest trading session, following a 10% jump last Friday, while Microsoft’s shares briefly dipped in response to the news.
OpenAI is set to begin using Amazon’s cloud services immediately, with the full planned capacity expected to go live by the end of 2026 and further expansion anticipated into 2027 and beyond.
The company’s recent restructuring marks a significant shift away from its non-profit origins and positions it for an initial public offering that Reuters reported could value the firm at up to $1 trillion.
However, analysts warn that soaring valuations and the massive spending commitments — exceeding $1 trillion, could fuel concerns that the ongoing AI boom might evolve into a speculative bubble.
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