Amazon & OpenAI Strike $38 Billion Compute Deal As Microsoft Exclusive Ends

Amazon has signed a $38 billion deal with OpenAI to supply NVIDIA chips, which has caused Amazon shares to jump 6%. The seven-year contract will see OpenAI run and scale its core AI workloads on Amazon Web Services' cloud infrastructure, positioning AWS as a key compute provider for OpenAI's expanding portfolio of generative-AI products. This deal comes just one week after Microsoft's exclusive cloud rights with OpenAI expired, allowing OpenAI to sign compute deals with other hyperscalers. The partnership will provide dedicated compute capacity for both AI training and inference, powering next-generation models and ChatGPT-like services. OpenAI has been on a dealmaking spree, signing cloud and hardware pacts totaling $1.4 trillion with Nvidia, Broadcom, Oracle, and Google. The infrastructure deployment that AWS is building for OpenAI features a sophisticated architectural design optimized for maximum AI processing efficiency and performance. The deal highlights AWS's large-scale AI infrastructure and brings it closer to frontier model developers, including clients such as Peloton and Thomson Reuters. OpenAI co-founder and CEO Sam Altman stated that scaling frontier AI requires massive, reliable compute, and the partnership with AWS strengthens the broad compute ecosystem that will power this next era. The deal has raised questions about whether Amazon needs these vast computing resources for its own operations, and whether the datacenter occupancy forecast by Goldman's James Schneider is accurate. The AWS-OpenAI compute deal has sent Amazon shares up, and it is likely that another AI compute deal will be unveiled soon, possibly when AI stocks start to lose momentum.