OpenAI and Amazon sign 38 billion-dollar deal for AI computing power

OpenAI and Amazon have signed a 38 billion-dollar (£28.9 billion) deal that enables the ChatGPT maker to run its artificial intelligence systems on Amazon’s data centres in the US.

OpenAI will be able to power its AI tools using “hundreds of thousands” of Nvidia’s specialised AI chips through Amazon Web Services as part of the deal announced on Monday.

The agreement comes less than a week after OpenAI altered its partnership with long-time backer Microsoft, which until earlier this year was the start-up’s exclusive cloud computing provider.

California and Delaware regulators last week also allowed San Francisco-based OpenAI, which was founded as a nonprofit, to move forward on its plan to form a new business structure to more easily raise capital and make a profit.

“The rapid advancement of AI technology has created unprecedented demand for computing power,” Amazon said in a statement on Monday.

It said OpenAI “will immediately start utilising AWS compute as part of this partnership, with all capacity targeted to be deployed before the end of 2026, and the ability to expand further into 2027 and beyond”.

AI requires huge amounts of energy and computing power and OpenAI has long signalled that it needs more capacity, both to develop new AI systems and keep existing products such as ChatGPT answering the questions of its hundreds of millions of users.

It recently made more than one trillion dollars worth of financial obligations in spending for AI infrastructure, including data centre projects with Oracle and SoftBank and semiconductor supply deals with chipmakers Nvidia, AMD and Broadcom.

Some of the deals have raised investor concerns about their “circular” nature, since OpenAI does not make a profit and cannot yet afford to pay for the infrastructure that its cloud backers are providing on the expectations of future returns on their investments.

OpenAI chief executive Sam Altman last week dismissed doubters he says have aired “breathless concern” about the deals.

“Revenue is growing steeply. We are taking a forward bet that it’s going to continue to grow,” Mr Altman said on a podcast where he appeared with Microsoft chief executive Satya Nadella.

Amazon is already the primary cloud provider to AI start-up Anthropic, an OpenAI rival that makes the Claude chatbot.