Amazon plans $50 billion investment in OpenAI

TLDR:

Amazon is negotiating an investment of up to $50 billion in OpenAI as part of the artificial intelligence company's effort to raise as much as $100 billion in new capital, which could value the ChatGPT maker at $830 billion.

Amazon CEO Andy Jassy (right) and OpenAI CEO Sam Altman (left)

Amazon Chief Executive Andy Jassy has taken a direct role in the discussions with OpenAI Chief Executive Sam Altman.

The talks, which began last year, remain fluid and could result in a term sheet signed in the coming weeks.

OpenAI, founded in 2015, has already secured an agreement with Amazon in November to purchase $38 billion in computing services over multiple years from Amazon Web Services (AWS).

The potential deal also includes provisions for OpenAI to use Amazon's proprietary artificial intelligence chips.

"Amazon is in talks to invest dozens of billions in ChatGPT-maker OpenAI and the figure could be as high as $50 billion," a source said.

The investment would position Amazon as the largest contributor to OpenAI's current fundraising round, which also involves negotiations with SoftBank for up to $30 billion, Nvidia for up to $30 billion, and Microsoft for less than $10 billion.

OpenAI has approached Middle Eastern sovereign wealth funds and venture firms such as Thrive Capital, Khosla Ventures, and the United Arab Emirates' MGX for additional commitments.

Altman traveled to the United Arab Emirates last week to advance those investment discussions.

The round follows OpenAI's valuation reaching $500 billion in October after a secondary share sale.

Amazon has separately invested about $8 billion in OpenAI rival Anthropic, including an additional $4 billion commitment, and opened an $11 billion data center campus for Anthropic in Indiana last October.

Amazon declined to comment on the OpenAI talks, and OpenAI did not respond to requests for comment.