By: Nick Gambino
Hot on the heels of their $1 billion deal with Disney that allows users to create Sora videos with animated characters, OpenAI is now reportedly in talks with Amazon to receive a $10 billion investment.
The deal, originally reported by The Information, would see the Bezos-run company investing $10 billion into the AI company as well as supplying them with artificial intelligence chips. This would allow OpenAI to properly compete with others in the AI race while also allowing Amazon to go head to head with Nvidia.
OpenAI has been doing the rounds, garnering favor and financial investments from a ton of big players. Back in 2019, Microsoft ponied up a whopping $13 billion, though, Sam Altman’s company is far from the only AI game in town that’s wooing these big names.
Anthropic has been eyeing the throne and received investments from Microsoft ($5 billion), Nvidia ($10 billion) and even Amazon themselves ($8 billion).
This new $10 billion deal between Amazon and OpenAI seems to be very much a “you scratch my back, I’ll scratch yours” situation. Amazon Web Services (AWS) has been at this AI chip game for about 10 years, but that hasn’t stopped Nvidia from dominating the market. The tech company currently sits at a $4.33 trillion market cap.
Amazon needs to make a move to secure a large part of that market if they’re going to continue to compete. This deal with OpenAI to use Amazon’s Trainium chips should help. They’ve already struck a deal with Amazon to purchase $38 billion of storage from AWS.
While AI definitely seems like it’s here to stay, these are still the formative years. The technology is still in its nascent stage and even the main power players haven’t been finalized. These various deals and investments in infrastructure will determine the future of AI.
If all of this is done right and AI proves to be as powerful and useful long-term as it purports, then we’re witnessing the beginning of a new age.
