OpenAI has signed a seven-year, US$38-billion deal to buy cloud services from Amazon.com, in its first big push to power its AI ambitions after a restructuring last week that gave the ChatGPT maker greater operational and financial freedom.
The agreement, announced on Monday, will give OpenAI access to hundreds of thousands of Nvidia GPUs to train and run its artificial intelligence models.
The deal underscores the AI industry’s insatiable appetite for computing power as companies race to build systems that can rival or surpass human intelligence.
OpenAI CEO Sam Altman has said the start-up is committed to spending $1.4-trillion to develop 30GW of computing resources — enough to power 25 million US homes.
The deal is also a major vote of confidence for the e-commerce giant’s cloud unit, Amazon Web Services, which some investors feared had fallen behind rivals Microsoft and Google in the AI race. Those fears were somewhat eased by the strong growth the business reported in the September quarter. Amazon shares hit an all-time high on Monday.
“This is a hugely significant deal and is clearly a strong endorsement of AWS compute capabilities to deliver the scale needed to support OpenAI,” said PP Foresight analyst Paolo Pescatore.
“Scaling frontier AI requires massive, reliable compute,” said Altman. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”
1GW/week
OpenAI will begin using Amazon Web Services immediately, with all planned capacity set to come online by the end of 2026 and room to expand further in 2027 and beyond.
Amazon plans to roll out hundreds of thousands of chips, including Nvidia’s GB200 and GB300 AI accelerators, in data clusters built to power ChatGPT’s responses and train OpenAI’s next wave of models, the companies said.
Amazon already offers OpenAI open weight models on Amazon Bedrock, which offers multiple AI models for businesses using AWS.
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Altman has said that eventually he would like OpenAI to add 1GW of compute every week — an astronomical sum as each gigawatt currently comes with a capital cost of over $40-billion.
OpenAI’s sweeping restructuring last week moved it further away from its non-profit roots and removed Microsoft’s first right to refusal to supply compute services in the new arrangement.
Reuters has reported that OpenAI was laying the groundwork for an initial public offering that could value the company at up to $1-trillion. But surging valuations of AI companies and their massive spending commitments, which total more than $1-trillion for OpenAI, have raised fears that the AI boom is turning into a bubble.
While OpenAI’s relationship with Microsoft, which the two forged in 2019, has helped push Microsoft to the top spot among its Big Tech peers in the AI race, both companies have been trying to reduce reliance on each other.
OpenAI has already tapped Google to supply it with cloud services. It also reportedly struck a deal with Oracle to buy $300-billion in computing power for about five years.
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The hefty commitments from OpenAI has raised some eyebrows on Wall Street, with analysts and investors questioning how the loss-making company will fund all those deals. Last week, OpenAI also agreed to purchase $250-billion of Microsoft’s Azure cloud services, as part of the restructuring deal. — Deborah Sophia and Aditya Soni, with Harshita Mary Varghese, (c) 2025 Reuters
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