OpenAI has signed a $38 billion deal with Amazon Web Services (AWS) to purchase cloud computing capacity through 2026 and beyond. This is a significant move away from Microsoft for Sam Altman’s OpenAI, which is diversifying its cloud partnerships with this deal.
CNBC reports that in a significant move away from its previous reliance on Microsoft, OpenAI has entered into a multi-billion dollar agreement with Amazon Web Services (AWS) to access the cloud provider’s vast computing infrastructure. The $38 billion deal, announced on Monday, marks one of OpenAI’s biggest steps towards diversifying its cloud partnerships and preparing for a potential future IPO.
Under the terms of the agreement, OpenAI will immediately begin running workloads on AWS, leveraging hundreds of thousands of Nvidia’s graphics processing units (GPUs) in the United States. The AI startup plans to expand this capacity in the coming years, with AWS committing to build out additional infrastructure specifically for OpenAI’s needs.
Dave Brown, a vice president at AWS, emphasized that the capacity being put down for OpenAI is completely separate from existing AWS data centers. “Some of that capacity is already available, and OpenAI is making use of that,” he said in an interview.
The deal comes amidst a flurry of agreements between OpenAI and major tech companies, including Nvidia, Broadcom, Oracle, and Google, totaling roughly $1.4 trillion in buildout commitments. While some skeptics have warned of an AI bubble and questioned the feasibility of turning these ambitious promises into reality, the AWS partnership strengthens OpenAI’s position in the rapidly evolving AI landscape.
Until earlier this year, OpenAI had an exclusive cloud agreement with Microsoft, which has invested a total of $13 billion in the company since 2019. However, in January, Microsoft announced that it would no longer be the exclusive cloud provider for OpenAI, moving to an arrangement where it would have the right of first refusal for new requests. Last week, this preferential status expired under newly negotiated commercial terms, allowing OpenAI to partner more widely with other providers.
Despite the AWS deal, OpenAI remains committed to working with Microsoft, reaffirming its intention to purchase an additional $250 billion of Azure services. The AI startup has also recently partnered with Oracle and Google for cloud services.
For Amazon, the OpenAI deal is significant not only in terms of its size and scale but also because of the cloud giant’s close ties to OpenAI rival Anthropic. Amazon has invested billions of dollars in Anthropic and is currently constructing an $11 billion data center campus in New Carlisle, Indiana, designed exclusively for Anthropic’s workloads.
The deal comes just weeks after AWS brought a considerable portion of the internet to its knees with an outage. As Breitbart News previously reported:
On Monday, a major outage at Amazon Web Services (AWS), a cloud platform that supports a substantial portion of the internet, resulted in the temporary shutdown of many apps, websites, and online tools relied upon by millions of users globally. The hours-long breakdown of the cloud system revealed the extent to which modern life depends on this infrastructure, affecting everything from banking apps and airlines to smart home devices and gaming platforms. Full service was not fully restored to all AWS customers until 3:01 p.m. ET according to Amazon’s status updates.
The root cause of the outage was traced back to an error in a technical update to the API of DynamoDB, a key cloud database service that stores user information and other critical data for numerous online platforms. The update issue affected the Domain Name System (DNS), which helps apps locate the correct server addresses. As a result, apps were unable to find the IP address for DynamoDB’s API and could not establish a connection.
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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