Amazon in Talks to Invest $10 Billion in OpenAI, Valuation May Exceed $500 Billion

ISLAMABAD: Amazon.com Inc is in discussions to invest in OpenAI, the company behind ChatGPT, in a potential deal that could value the artificial intelligence firm at more than $500 billion, according to a source familiar with the matter.

The source said Amazon may invest around $10 billion, though talks remain fluid and no final agreement has been reached. The discussions highlight the AI sector’s growing demand for massive computing power as companies race to develop systems that can rival or surpass human intelligence.

OpenAI has already signed multi-billion-dollar agreements this year with companies such as Nvidia and Oracle. In November, OpenAI also entered into a $38 billion deal to purchase cloud services from Amazon.

Despite the rapid expansion, investors remain cautious about whether AI demand can be sustained and whether the enormous investments will deliver the expected returns.

The talks come as OpenAI prepares the groundwork for a potential initial public offering that could value the company at up to $1 trillion, Reuters reported earlier.

The discussions also underscore OpenAI’s increased flexibility to partner with multiple firms after transitioning away from its non-profit origins and finalizing its agreement with Microsoft. Under the deal, OpenAI operates as a public benefit corporation controlled by a non-profit entity that retains a financial stake in the company.

Microsoft currently holds a 27% stake in OpenAI and has exclusive rights to sell OpenAI’s models to its cloud customers.

Neither OpenAI, Amazon, nor Microsoft immediately responded to requests for comment.

Read more: OpenAI Fixes Long-Standing ChatGPT Issue: Users Can Now Disable Em Dashes

According to The Information, which first reported the talks, OpenAI plans to use Amazon’s Trainium chips, which compete with offerings from Nvidia and Google. Amazon’s investment could also trigger a broader fundraising round involving additional investors.

OpenAI is reportedly exploring the sale of an enterprise version of ChatGPT to Amazon, though it remains unclear whether the agreement would include integration of ChatGPT features into Amazon’s shopping and consumer applications.