OpenAI has signed a landmark seven-year, $38 billion agreement to purchase cloud services from Amazon Web Services (AWS), marking a major step in the company’s AI ambitions following its recent restructuring. The deal, announced on Monday, will provide OpenAI with access to hundreds of thousands of Nvidia graphics processors, essential for training and running its AI models, reports Reuters.
The partnership highlights the AI industry's ever-growing demand for computing power as companies compete to develop next-generation systems capable of surpassing human intelligence. OpenAI CEO Sam Altman has committed to spending $1.4 trillion over the next decade to build 30 gigawatts of computing power—enough to supply approximately 25 million U.S. homes.
This deal also signals strong confidence in Amazon’s cloud division, AWS, which has faced concerns about being outpaced by Microsoft and Google in the AI race. Despite such concerns, AWS has posted strong growth, easing investor fears, as reflected in the sharp rise in Amazon’s stock price. On Monday, Amazon shares hit an all-time high, adding nearly $140 billion to its market value.
“This is a hugely significant deal and a clear endorsement of AWS’s compute capabilities, which will help scale OpenAI’s operations,” said Paolo Pescatore, an analyst at PP Foresight.
Altman emphasized that scaling frontier AI requires massive, reliable computing power. "Our partnership with AWS strengthens the broad compute ecosystem necessary to support this next era of AI," he said.
OpenAI will begin using AWS immediately, with full capacity expected to be online by the end of 2026. Amazon plans to deploy hundreds of thousands of Nvidia chips, including the GB200 and GB300 AI accelerators, to support OpenAI’s models, including training the next generation of systems like ChatGPT.
Altman has previously stated his ambition to add 1 gigawatt of computing capacity each week—a daunting goal, as each gigawatt of computing power costs over $40 billion in capital investment.
OpenAI’s recent restructuring moved the company further away from its non-profit origins and eliminated Microsoft’s preferential rights to supply its compute services. Alongside AWS, OpenAI has struck other deals with major tech companies, including Alphabet's Google and Oracle. In June, it was reported that OpenAI signed a deal with Oracle worth $300 billion for computing power over five years.
The company’s restructuring is also seen as a step toward an Initial Public Offering (IPO), with estimates suggesting OpenAI could be valued at up to $1 trillion. However, the massive spending commitments and mounting losses have raised concerns among analysts about the sustainability of the AI boom.
While OpenAI expects its annualized revenue run rate to reach $20 billion by the end of the year, it faces growing financial pressure. The company’s extensive spending on cloud services, combined with its ongoing losses, has prompted scrutiny from investors.
Despite the challenges, OpenAI’s commitment to building cutting-edge AI infrastructure and forming high-stakes partnerships positions it at the forefront of the rapidly evolving AI sector.
Bd-pratidin English/ Jisan
