Amazon has announced that it will invest $50 billion in ChatGPT maker OpenAI. With this investment, the e-commerce major is deepening its partnership with the Sam Altman-led artificial intelligence (AI) company as Nvidia reportedly reconsiders its own funding strategy. Amazon’s move contrasts with Nvidia’s reported shift from a previously proposed $100 billion infrastructure investment in OpenAI to discussions around a smaller $30 billion direct equity stake, signalling differing approaches among tech giants toward backing the AI company.The latest deal will see Amazon Web Services (AWS) and OpenAI jointly develop a “Stateful Runtime Environment” powered by OpenAI models, which will be made available to AWS customers through Amazon Bedrock to build and deploy generative AI apps at scale. Under the agreement, AWS will become the exclusive third-party cloud distribution provider for OpenAI Frontier, a platform designed to help organisations manage teams of AI agents.
OpenAI is also set to consume up to 2 gigawatts of Trainium capacity on AWS infrastructure to support these advanced workloads. In addition, the two companies plan to create customised AI models for Amazon’s customer-facing services.
What Amazon CEO Andy Jassy said about the OpenAI investment
In a post announcing the company’s investment in OpenAI, Amazon CEO Andy Jassy wrote: “Excited about our new strategic partnership with @OpenAI. Developers and companies of all kinds are eager to run services powered by OpenAI models on AWS, and our unique collaboration will provide a stateful runtime environment for them that’s powered by OpenAI’s frontier intelligence on Amazon Bedrock.OpenAI is also going big on our custom Trainium chips, which are 30-40% more price performant than comparable GPUs, to power their growth. Both the leading AI labs now have made significant commitments to Trainium, which is gaining a lot of momentum.We’ll be the exclusive 3P cloud distribution provider for OpenAI Frontier (which enables organisations to build, deploy, and manage teams of AI agents).And finally, we’re excited about our investment in OpenAI — it’s an extremely talented team with great products, IP, and vision for how they can continue to serve customers and enterprises. We think they’ll be one of the big winners in AI, we can help them grow, and we believe we’ll earn a strong return for Amazon over the long term.”Amazon’s investment in OpenAI will be in two phases. The company will begin with $15 billion upfront and an additional $35 billion tied to certain conditions. The two companies are working together to build a “Stateful Runtime Environment” powered by OpenAI’s models, which will be offered through Amazon Bedrock. These stateful environments are designed to let models access compute, memory and identity tools while allowing developers to retain context, reference prior tasks and work across different software systems and data sources. The aim is to support ongoing projects and structured workflows rather than one-time prompts. The environment will be optimised for AWS infrastructure and integrated with Amazon Bedrock AgentCore and related services so that AI apps can operate alongside other AWS-based systems. The launch is expected in the coming months.AWS will also act as the exclusive third-party cloud distribution provider for OpenAI Frontier, expanding the availability of OpenAI’s enterprise AI platform. Frontier enables organisations to build, deploy and manage AI agents that operate across business systems with shared context and built-in governance controls, without requiring customers to manage core infrastructure.OpenAI and AWS are expanding their existing $38 billion agreement by an additional $100 billion over eight years. As part of this, OpenAI will use around 2 gigawatts of Trainium compute capacity to support Stateful Runtime, Frontier and other AI workloads. The agreement is intended to improve cost efficiency and ensure long-term capacity. It includes support for Trainium3 and the upcoming Trainium4 chips, expected from 2027, which will offer higher compute performance and memory bandwidth.The two companies will also collaborate on customised AI models for Amazon’s customer-facing applications. These models will complement Amazon’s existing Nova models, giving internal teams additional tools to develop AI-driven products and services.Commenting on the deal, Altman said, “OpenAI and Amazon share a belief that AI should show up in ways that are practical and genuinely useful for people. Combining OpenAI’s models with Amazon’s infrastructure and global reach helps us put powerful AI into the hands of businesses and users at real scale.”