The announcement comes less than a week after Amazon laid off 14,000 people.
OpenAI has signed a new deal with Amazon worth a total of $38 billion, allowing the artificial intelligence giant to run AI workloads across Amazon Web Services (AWS) cloud infrastructure.
The seven-year deal announced Monday marks the e-commerce giant’s first major AI push after a reorganization last week.
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The new deal will give the ChatGPT maker access to thousands of Nvidia graphics processors to train and run artificial intelligence models.
Experts say this doesn’t mean OpenAI will be able to train models on AWS-hosted websites, such as the New York Times, Reddit, or United Airlines’ website.
“Running OpenAI training within AWS does not change the ability to scrape content from AWS-hosted websites (which was already possible if it was publicly readable). This is strictly about the economics of renting and purchasing GPU (graphics processing unit) capacity,” Joshua McEntee, CEO of AI discovery company PolyguardAI, told Al Jazeera.
The deal is also a significant vote of confidence in the e-commerce giant’s cloud arm AWS, which some investors worried was lagging behind rivals Microsoft and Google in the artificial intelligence (AI) race. Those concerns were somewhat allayed by the business’ strong growth reported in the September quarter.
OpenAI will begin using AWS immediately, with all planned capacity coming online by the end of 2026, with room for further expansion in 2027 and beyond.
Amazon plans to deploy hundreds of thousands of chips, including Nvidia’s GB200 and GB300 AI accelerators, in data clusters built to power ChatGPT’s responses and train OpenAI’s next wave of models, the companies said.
Amazon already offers OpenAI models on Amazon Bedrock and offers multiple AI models for enterprises using AWS.
OpenAI underwent a major reorganization last week, moving the company further away from its nonprofit roots and also stripping Microsoft of its first right to refuse services under the new arrangement.
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Amazon’s announcement about its AI investments comes just days after the company laid off 14,000 people, despite CEO Andy Jassy commenting on Thursday’s earnings call that the layoffs were not due to AI.
“The announcement we made a few days ago is not really financial, or even AI-driven, at least for now,” Jassy said.
OpenAI CEO Sam Altman said the company is committed to spending $1.4 trillion to develop 30 gigawatts of computing resources that could power about 25 million U.S. homes.
“Scaling frontier AI requires large-scale, reliable computing,” Altman said. “Our partnership with AWS strengthens the broader computing ecosystem that powers this next era and brings advanced AI to everyone.”
This comes amid growing concerns about the huge energy demands needed to run AI data centers. Lawrence Berkeley National Laboratory estimates that AI data centers will use up to 12 percent of U.S. electricity by 2028.
An October AP/NORC poll found that 41% of Americans are very concerned about the impact of AI on the environment, and the remaining 30% say they are somewhat concerned as the industry expands its data center footprint across the country.
signs of bubble
Soaring valuations for AI companies and massive spending on OpenAI, totaling more than $1 trillion, are raising concerns that the AI boom is turning into a bubble.
As Reuters reported in June, OpenAI already uses Alphabet Inc.’s Google to provide its cloud services. It also reportedly signed a deal to buy $300 billion in computing power over about five years.
The relationship between OpenAI and Microsoft, which the two companies forged in 2019, helped propel Microsoft to the top spot among big tech companies in the AI race, but the two companies have recently made moves to reduce their interdependence.
OpenAI and Amazon could not be reached for comment.
On Wall Street, Amazon’s stock price soared on news of the new deal. As of 11:15 a.m. in New York (16:15 p.m. Japan time), the stock is up 4.7%.
