Amazon in talks to invest $50 billion in OpenAI

Amazon is in discussions to invest tens of billions of dollars in OpenAI, the creator of ChatGPT, with a potential investment figure reaching $50 billion, Reuters has reported, citing an unnamed source. The source indicated that these talks are in preliminary stages and final terms have not been set.

Major technology firms and investors, including SoftBank Group Corp, are actively pursuing partnerships with OpenAI, which is making substantial investments in data centers. These entities anticipate that closer collaboration with the AI startup will provide a competitive advantage in the artificial intelligence sector. OpenAI is seeking to raise up to $100 billion in funding, which would value the company at approximately $830 billion, as reported by Reuters on Tuesday. Separately, SoftBank Group is negotiating an additional investment of up to $30 billion in the startup.

OpenAI recently entered into a $10 billion computing agreement with Cerebras, a competitor to Nvidia, earlier this month. The company is also preparing for an initial public offering that could result in a valuation of up to $1 trillion, according to further Reuters reporting.

The Wall Street Journal, which first reported on these developments, stated that Amazon CEO Andy Jassy is leading the negotiations with OpenAI CEO Sam Altman. An investment of up to $50 billion would position Amazon as the largest contributor in OpenAI’s current funding round.

Amazon is also an investor in Anthropic, having committed approximately $8 billion to the company, which was recently valued at $183 billion. Anthropic has become a significant competitor to OpenAI, largely due to strong adoption of its services by enterprise clients. The company projects that its annualized revenue run rate could more than double and potentially nearly triple by 2026, reaching around $26 billion.

Amazon declined to comment on the matter. OpenAI did not provide an immediate response to Reuters’ inquiry.