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OpenAI secures $38bn Amazon cloud deal in computing power push
OpenAI has signed a seven-year, $38bn (£29bn) agreement with Amazon Web Services (AWS) to access cloud infrastructure and Nvidia graphics processors, marking its latest move to diversify computing resources beyond Microsoft. The deal, announced Monday, follows a restructuring of OpenAI's governance and a string of partnerships totaling over $1tn in 2025 alone.
Shift away from Microsoft reliance
The agreement reduces OpenAI's dependence on Microsoft, its longtime cloud provider under an exclusive deal that loosened in January. Since then, the ChatGPT developer has inked contracts with Oracle, Broadcom, AMD, and Nvidia, signaling a strategic pivot toward a multi-vendor approach.
"Scaling frontier AI requires massive, reliable compute," OpenAI 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."
Financial stakes and market reaction
OpenAI's spending spree comes despite unprofitability, with Microsoft's latest quarterly results revealing a $12bn loss for the AI firm. Yet the AWS deal propelled Amazon's shares to a record high, adding $140bn (£106bn) to its market valuation.
AWS CEO Matt Garman emphasized the platform's role in supporting OpenAI's workloads, calling AWS "uniquely positioned" for the task. Analysts note the deal underscores OpenAI's race to secure computing power amid surging AI demand.
Industry scrutiny and bubble warnings
The partnership deepens a web of interlinked AI investments, drawing attention from regulators and economists. Bank of England officials, the IMF, and JPMorgan CEO Jamie Dimon have cautioned about potential overvaluation in the sector. Dimon told the BBC last month that "the level of uncertainty should be higher in most people's minds."
Altman acknowledged the unprecedented scale of investment but defended it as justified by rapid revenue growth. "Yes, the investment loans are unprecedented," he told the BBC, "but it's also unprecedented for companies to be growing revenue this fast."
Broader implications
OpenAI's diversification follows a governance overhaul last week, transitioning from a non-profit structure and renegotiating its Microsoft ties for greater autonomy. The AWS deal, analysts say, reflects a calculated bid to cement leadership in AI through sheer computational scale.
"The deal with AWS shows that OpenAI considers its path to leadership paved with getting access to as much computing power as it can get its hands on," said Kim Forrest, chief investment officer at Bokeh Capital Partners.
Kim Forrest, Bokeh Capital Partners
Forrest added that Microsoft's reduced stake in OpenAI has enabled partnerships with near-competitors, further complicating the AI industry's alliance landscape.
