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Amazon shares increased 4% after the announcement.
The agreement comes less than a week after OpenAI altered its
partnership with its longtime backer Microsoft, which until
early this year was the startup's exclusive cloud computing
provider.
California and Delaware regulators also last week allowed San
Francisco-based OpenAI, which was founded as a nonprofit, to
move forward on its plan to form a new business structure to
more easily raise capital and make a profit.
“The rapid advancement of AI technology has created
unprecedented demand for computing power,” Amazon said in a
statement Monday. It said OpenAI “will immediately start
utilizing AWS compute as part of this partnership, with all
capacity targeted to be deployed before the end of 2026, and the
ability to expand further into 2027 and beyond.”
AI requires huge amounts of energy and computing power and
OpenAI has long signaled that it needs more capacity, both to
develop new AI systems and keep existing products like ChatGPT
answering the questions of its hundreds of millions of users.
It's recently made more than $1 trillion worth of financial
obligations in spending for AI infrastructure, including data
center projects with Oracle and SoftBank and semiconductor
supply deals with chipmakers Nvidia, AMD and Broadcom.
Some of the deals have raised investor concerns about their
“circular” nature, since OpenAI doesn't make a profit and can't
yet afford to pay for the infrastructure that its cloud backers
are providing on the expectations of future returns on their
investments. OpenAI CEO Sam Altman last week dismissed doubters
he says have aired “breathless concern” about the deals.
“Revenue is growing steeply. We are taking a forward bet that
it’s going to continue to grow,” Altman said on a podcast where
he appeared with Microsoft CEO Satya Nadella.
Amazon is already the primary cloud provider to AI startup
Anthropic, an OpenAI rival that makes the Claude chatbot.
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