Amazon announces strategic partnership with OpenAI, to invest $50 billion for AI innovation

E-commerce giant Amazon has planned to invest $50 billion in OpenAI, starting with an initial $15 billion and followed by another $35 billion in the coming months, the companies announced on Friday.

The latest investment is part of a significant funding round for OpenAI, which is raising $110 billion in new capital at a pre-money valuation of $730 billion. It also includes $30 billion from SoftBank and $30 billion from Nvidia.

“OpenAI and Amazon today announced a multi-year strategic partnership to accelerate AI innovation for enterprises, startups, and end consumers around the world. Amazon will also invest $50 billion in OpenAI, starting with an initial $15 billion investment and followed by another $35 billion in the coming months when certain conditions are met,” the release read.

Key details of the partnership

Amazon Web Services (AWS) will serve as the exclusive third-party cloud provider for OpenAI Frontier, the enterprise platform used by the ChatGPT creator to develop, deploy, and manage AI agents. OpenAI will also spend an additional $100 billion on Amazon Web Services over the next 8 years. The two companies in November announced a deal under which the model builder would use some $38 billion in AWS services over seven years.

OpenAI will use 2 gigawatts of capacity powered by Amazon's in-house Trainium chips to support computing demand, according to the companies.

Additonally, OpenAI and Amazon are collaboratively developing a Stateful Runtime Environment powered by OpenAI’s models, which will be available through Amazon Bedrock.

A Stateful Runtime Environment enables developers to maintain context, recall previous work, collaborate across software tools and data sources, and access computational resources. It is designed to support ongoing projects and workflows, the companies noted.

OpenAI and Amazon will also work together to create customised models accessible to Amazon developers, aimed to enhance the e-commerce giant's customer-facing apps.

Amazon's significant investment, a longtime backer of OpenAI rival Anthropic, further strengthens its ties with the ChatGPT maker.

Relationship with Microsoft remains strong

Meanwhile, Microsoft Corp., OpenAI’s major backers and a former exclusive infrastructure partner, said its relationship with the ChatGPT maker remains strong. “Nothing about today’s announcements in any way changes the terms of the Microsoft and OpenAI relationship,” the companies said in a joint statement on Friday.

“The partnership remains strong and central. Microsoft and OpenAI continue to work closely across research, engineering, and product development, building on years of deep collaboration and shared success,” it added.