"Amazon is in early discussions to invest as much as $10 billion in OpenAI in a deal that would see the AI lab using the e-commerce giant's AI chips, CNBC reported. If it materializes, the deal would value OpenAI at more than $500 billion, Bloomberg reported, citing an anonymous source. Amazon has been looking to diversify its bets in the AI race, which has so far seen it partner up and invest $8 billion in Anthropic, a rival to OpenAI."
"Amazon investing in OpenAI would mark the latest in a series of circular deals in the AI space - major hardware manufacturers and cloud providers strike deals with young AI companies to use their products, while the upstarts commit to using their data centers and chips for training their AI models. This past March, OpenAI invested $350 million of equity into CoreWeave, which used the funds to buy chips from its backer Nvidia."
"Those same chips provide compute to OpenAI, which increases CoreWeave's revenue and in the end makes OpenAI's stake more valuable. Then in October, OpenAI signed a deal to pick up a 10% stake in AMD and committed to using the chipmaker's AI GPUs, and also signed a chip usage agreement with Broadcom that month. And in November, the ChatGPT maker signed a $38 billion cloud computing deal with Amazon."
Amazon is in early talks to invest up to $10 billion in OpenAI in a deal that would have OpenAI use Amazon's AI chips. Bloomberg reported the investment could value OpenAI at more than $500 billion. Amazon previously invested $8 billion in Anthropic and recently unveiled a new Trainium chip and plans for the next generation to complement AWS. OpenAI completed a transition to a for-profit model, allowing deals beyond Microsoft, which holds a 27% stake. The AI sector shows circular commercial ties: OpenAI invested $350 million in CoreWeave to buy Nvidia chips; OpenAI also took a 10% stake in AMD and signed chip deals with Broadcom, and signed a $38 billion cloud deal with Amazon.
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