OpenAI announces a $38 billion cloud computing partnership with Amazon, marking its first major collaboration with the tech giant.
OpenAI has reached a new “partnership” worth $38 billion with Amazon Web Services (AWS) — its first ever deal with the world’s leading cloud infrastructure provider.
In a major development for the $500 billion artificial intelligence (AI) giant, the company will begin using AWS’s cloud infrastructure immediately, with access to hundreds of thousands of Nvidia GPUs (graphics processing units) in the US. It will also consume even more of Amazon’s computing power in the coming years as demand for AI computing continues to grow.
Amazon’s shares jumped almost $38 billion compute contract.
In the short term, OpenAI will be using existing AWS data centres, but Amazon has pledged to create more infrastructure for the AI company as the agreement progresses.
“It’s completely separate capacity that we’re putting down,” Dave Brown, Vice President of Compute and Machine Learning Services at AWS, said in an interview. “Some of that capacity is already available, and OpenAI is making use of it.”
The development is the latest in OpenAI’s expansive recent growth strategy. The company has revealed nearly $1.4 trillion in new OpenAI cloud partnership with major technology companies in the last few months alone, including Nvidia, Broadcom, Oracle, and Google. OpenAI Amazon deal have been met with both enthusiasm and criticism, with some analysts speculating that an “AI bubble” may be forming and others casting doubt on whether the industry has the capacity to meet such grandiose commitments.
Until earlier this year, Microsoft had been OpenAI’s sole cloud provider. The technology behemoth first invested in OpenAI in 2019 and has since committed $13 billion to the company. However, in January, Microsoft announced that it would not retain exclusivity over OpenAI’s cloud services in future, but would instead have “right of first refusal” on projects.
OpenAI’s deal with Amazon is a strategic shift. OpenAI has been diversifying away from Microsoft, seeking more flexibility and capacity to support its expanding work.
The tech company also needs Amazon AI investment power to advance artificial intelligence (AI). Amazon’s global infrastructure and high-performance GPU clusters will help OpenAI’s future models and products.
