Amazon Bets $50 Billion on OpenAI in Major Cloud and AI Alliance

In a move that reshapes the artificial intelligence industry, Amazon has committed up to $50 billion to OpenAI. The strategic partnership, announced Friday, will see OpenAI significantly increase its use of Amazon Web Services (AWS) infrastructure, including a pledge to run 2 gigawatts of power on Amazon's custom Trainium AI chips.

This agreement marks a notable pivot for Amazon, which has invested billions in OpenAI's rival, Anthropic, since 2023. Amazon CEO Andy Jassy told CNBC the new OpenAI partnership does not weaken the company's ties with Anthropic. "[Anthropic has] always had multiple partners, and we do too," Jassy said. "That relationship will stay strong."

The deal expands an existing $38 billion agreement, with OpenAI now set to spend $100 billion on AWS over eight years. It also stipulates that Amazon and OpenAI will co-develop models for Amazon's consumer products. The investment is structured in tranches, with a regulatory filing indicating the final $35 billion is contingent on OpenAI hitting unspecified milestones and completing a U.S. public listing by the end of 2028. One reported, but unconfirmed, milestone is the achievement of Artificial General Intelligence (AGI).

For AWS, the partnership is a direct competitive win against Microsoft, OpenAI's primary backer, and other cloud rivals. Analysts at William Blair noted the deal helps justify Amazon's massive $200 billion capital expenditure forecast for the year, much of which is earmarked for AI data centers and chips. The announcement also follows a difficult period for Amazon's stock, which had shed hundreds of billions in market value since early February.

The alliance provides Amazon with accelerated access to leading AI models as it works to catch up in consumer and business applications. While Amazon has developed its own Nova foundation models and an upgraded Alexa, it has largely watched as competitors forged ahead with AI commerce agents. Jassy has recently indicated a new openness to integrating third-party AI tools, suggesting this deal with OpenAI could be the first step toward that future.