According to Manufacturing.net, OpenAI and Amazon have signed a massive $38 billion deal that enables the ChatGPT maker to run its artificial intelligence systems on Amazon’s U.S. data centers. The agreement gives OpenAI access to “hundreds of thousands” of Nvidia’s specialized AI chips through Amazon Web Services, with all capacity targeted to be deployed before the end of 2026 and potential expansion into 2027. This comes less than a week after OpenAI altered its partnership with longtime backer Microsoft, which had been its exclusive cloud provider until early this year. Amazon shares immediately jumped 4% following Monday’s announcement, while California and Delaware regulators recently approved OpenAI’s plan to form a new business structure to more easily raise capital and make profit. OpenAI has made over $1 trillion worth of financial obligations for AI infrastructure, including deals with Oracle, SoftBank, Nvidia, AMD and Broadcom.
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<h2 id="cloud-wars”>The Cloud Power Play
This is basically Amazon’s counterpunch in the AI infrastructure arms race. Microsoft had that exclusive relationship with OpenAI, and now Amazon is grabbing a huge piece of the action. But here’s the thing – Amazon is already the primary cloud provider to Anthropic, OpenAI’s biggest rival. So they’re playing both sides, which is pretty smart business if you think about it.
What’s really fascinating is the timing. This deal dropped just days after OpenAI restructured its Microsoft partnership. That’s no coincidence. OpenAI is clearly diversifying its cloud providers, and they’re doing it fast. They need insane amounts of computing power, and they can’t afford to be locked into one vendor anymore.
The $38 Billion Bet
Let’s talk about that $38 billion number for a second. That’s not pocket change, even for Amazon. But the real story is how all these cloud providers are making these massive upfront bets on OpenAI’s future revenue. Sam Altman himself admitted they’re taking a “forward bet” that revenue will continue growing steeply.
And that’s where it gets interesting. OpenAI doesn’t actually make a profit yet. They’re spending like they’re already profitable, but they’re running on investor faith. Some critics have called these deals “circular” because OpenAI can’t afford to pay for the infrastructure that cloud providers are fronting. Altman dismissed this as “breathless concern,” but you’ve got to wonder – what happens if the revenue growth doesn’t materialize as expected?
Who Wins, Who Loses?
Amazon is clearly a winner here – their stock popped 4% immediately. Nvidia is probably dancing in the streets too, since this means moving hundreds of thousands more of their AI chips. Microsoft? Well, they’re not exactly losing, but they’ve definitely lost that exclusive status. They’ve still got a deep partnership with OpenAI, but now they have to share.
The real question is whether this deal accelerates AI development or just creates more infrastructure overspending. We’re seeing these trillion-dollar commitments when nobody really knows how sustainable the current AI boom is. But one thing’s for sure – the cloud providers are all-in, and they’re betting big that AI is the future of computing.
