OpenAI announced a $38 billion partnership with Amazon’s AWS on Monday, its first major cloud computing deal since striking a new agreement with Microsoft that gave it more flexibility.
OpenAI will use AWS compute, which consists of “hundreds of thousands of state-of-the-art Nvidia GPUs,” according to a joint statement between the companies.
Amazon shares were up more than 5% in premarket trading on the news. The deal is the latest example of a cloud provider leveraging its massive size to provide resources to compute-hungry AI companies.
The partnership underscores OpenAI’s ongoing desire for more computing resources to train and run its frontier AI models, as well as its consumer products, such as ChatGPT, as it races to achieve the holy grail in the AI race: AGI.
“AWS’s leadership in cloud infrastructure combined with OpenAI’s pioneering advancements in generative AI will help millions of users continue to get value from ChatGPT,” the announcement said.
OpenAI’s new definitive agreement with Microsoft, announced last week as part of OpenAI’s restructuring to a more traditional for-profit business, removed the tech giant’s power to have first refusal on cloud computing deals. Microsoft, an early investor in OpenAI, now has a roughly 27% in OpenAI Group PBC, a newly formed for-profit public benefit corporation.
OpenAI said it will use Amazon’s AWS infrastructure “to run and scale OpenAI’s core artificial intelligence (AI) workloads starting immediately.” The announcement also says the partnership “will have continued growth over the next seven years.”
“Scaling frontier AI requires massive, reliable compute,” OpenAI co-CEO Sam Altman said in a statement. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”
Related stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
After starting last week with 14,000 layoffs, Amazon ended the week on a high note with third-quarter earnings topping expectations and disclosures about how the company has made progress on AI.
With AI companies’ valuations growing, along with their spending commitments, there’s been growing concern on Wall Street over a possible bubble amid increasingly circular deal structures and dependencies between leading companies.
Under Altman’s leadership, OpenAI has paved the way for many of the recent blockbuster agreements. He and his top lieutenants have repeatedly said one of the biggest problems facing OpenAI is the lack of compute. All told, OpenAI has previously lined up $1.4 trillion in spending commitments in the coming years for roughly 30 gigawatts of capacity.
During a recent livestream, Altman said there have been conversations around OpenAI about how to build a compute factory that would allow OpenAI to create 1 gigawatt of compute per week.
