OpenAI ditches Microsoft for Amazon in $38b cloud power move

OpenAI has signed a jaw-dropping $38 billion deal with Amazon Web Services (AWS), marking a major shift in the AI powerhouse’s cloud strategy.

The multi-year partnership will see OpenAI run massive AI workloads on AWS infrastructure, harnessing hundreds of thousands of Nvidia GPUs across US data centres.

The deal also includes plans to expand capacity further in the coming years, as Amazon prepares to build additional infrastructure tailored for OpenAI’s growing needs.

The announcement sent Amazon’s stock soaring by nearly 5%, reflecting investor excitement over the company’s deepening role in the AI arms race.

For OpenAI, the move is part of an aggressive expansion spree. The company, now valued at roughly $500 billion, has recently inked nearly $1.4 trillion in infrastructure commitments with tech giants like Nvidia, Broadcom, Oracle, and Google.

But analysts warn this wave of mega-deals may be fueling what some call an “AI bubble,” questioning whether the US has the energy and hardware capacity to deliver on such colossal ambitions.

Until recently, Microsoft had been OpenAI’s exclusive cloud partner, investing over $13 billion since 2019.

But in January, that exclusivity quietly ended, and now, with Amazon stepping in, Silicon Valley’s biggest rivalry just got a lot more interesting.