CNBC confirmed on Thursday that Amazon is in talks to invest up to $50 billion in OpenAI, a big vote of confidence by the e-commerce giant after it invested in one of the largest competitors of the startup.
According to the familiar sources, OpenAI CEO Sam Altman and Amazon CEO Andy Jassy have been having direct conversations about this investment plan. Amazon has invested billions of dollars in OpenAI competitor Anthropic since 2023.
People familiar with the matter reported that the specifics of the negotiations between Amazon and OpenAI remain dynamic and the overall sum might alter, yet the term sheet might be signed within the next few weeks. An Amazon representative refused to respond to the matter. The Wall Street Journal had been the first to mention the figure of $50 billion.
Therefore, OpenAI is also having fundraising talks with other investors, and the entire round may end at approximately $100 billion. CNBC previously stated that Altman was in the United Arab Emirates to have investment discussions with sovereign wealth funds last week.
The funding round of the startup might be completed in two phases, the first phase being investment by strategics such as Amazon, Microsoft, and Nvidia. The source said that other investments by players such as SoftBank, which is currently negotiating a deal to invest up to $30 billion in OpenAI, would then come in.
It was established in 2015 as a nonprofit research laboratory, and burst into the mainstream in 2022 when it released its generative AI chatbot ChatGPT. OpenAI has become one of the biggest business organizations, and its worth has reached $500 billion in October following a sale of secondary shares.
CNBC previously stated that Amazon and OpenAI have been negotiating a possible investment since last year, and the deal would possibly involve an agreement to utilize Amazon AI chips.
However, Anthropic was founded by a group of former OpenAI executives and researchers, including CEO Dario Amodei, in 2021. Its most famous project is its family of AI models named Claude, and the company recently raised a multibillion-dollar funding round at a valuation of $350 billion in the early part of this month.
Amazon Web Services became the main cloud provider of Anthropic in 2023 and its main training partner in 2024. It still plays both of those functions; Amazon has been reducing its expenses in its business to make increased investment in AI and accelerated development of data centers.
Amazon announced on Wednesday that it would layoff approximately 16,000 corporate employees, marking its second round of mass job cuts since last October. Amazon launched a $11 billion Anthropic data center campus in Indiana in October, called Project Rainier.
Amazon announced that it anticipated capital spending to touch $125 billion by 2026, the largest amount the megacap companies had been spending at the time.
