Wedoany.com Report-Nov. 4, OpenAI has signed a seven-year, $38 billion agreement with Amazon.com to purchase cloud services from Amazon Web Services (AWS), marking its first major infrastructure investment since a recent restructuring that granted the company more operational and financial independence. Announced on Monday, the deal will provide OpenAI with access to hundreds of thousands of Nvidia graphics processors to train and operate its advanced artificial intelligence models.

The agreement highlights the increasing demand for computing capacity across the AI industry as companies seek to develop systems capable of high-level intelligence performance. OpenAI CEO Sam Altman said the company plans to invest $1.4 trillion to build 30 gigawatts of computing resources, equivalent to the power consumption of around 25 million U.S. households.

The deal also reinforces confidence in Amazon’s cloud business, AWS, which had faced concerns about losing momentum to competitors Microsoft and Google in the AI sector. Following the announcement, Amazon’s shares reached an all-time high, rising 5% on Monday after a 10% increase on Friday, boosting its market capitalization by nearly $140 billion. Microsoft’s shares briefly dipped on the news.

PP Foresight analyst Paolo Pescatore commented: “This is a hugely significant deal and clearly a strong endorsement of AWS compute capabilities to deliver the scale needed to support OpenAI.”

Altman emphasized the importance of reliable computing resources, stating: “Scaling frontier AI requires massive, reliable compute. Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”

OpenAI will begin using AWS immediately, with all designated capacity expected to be available by the end of 2026, and potential for further expansion in 2027 and beyond. Amazon plans to deploy hundreds of thousands of Nvidia’s GB200 and GB300 AI accelerators within its data clusters to support ChatGPT’s functions and future OpenAI model development.

OpenAI’s restructuring last week also ended Microsoft’s first right of refusal to provide compute services under the company’s new structure. In addition to the Amazon partnership, OpenAI has reportedly secured agreements with Alphabet’s Google for cloud services and Oracle for $300 billion worth of computing capacity over five years.

OpenAI’s reorganization could be part of preparations for an initial public offering potentially valuing the firm at up to $1 trillion. However, analysts have expressed concern about the rising costs and possible overvaluation of AI companies.

OpenAI’s annualized revenue run rate is projected to reach about $20 billion by the end of this year, but losses are also increasing, according to sources cited by Reuters. Despite its strong growth, questions remain about how the company will finance its extensive spending commitments, which include more than $1 trillion in planned infrastructure investments.

OpenAI’s collaboration with Amazon represents a significant milestone in the global AI landscape, combining large-scale computing capacity with rapid technological advancement to support the next generation of artificial intelligence applications.