Amazon most expensive in history after the deal with OpenAI. Is this a betrayal by Microsoft and what about Bezos?

OpenAI announced a landmark $38 billion deal with Amazon Web Services (AWS) on Monday. This is OpenAI's first contract with AWS and a signal that the company behind ChatGPT is no longer solely dependent on Microsoft for its cloud infrastructure. Amazon's shares are soaring to records, and the fortune of the company's founder is almost $267 billion.

The news was met with a positive market reaction, with Amazon's shares rising by about 5%. to a record high of over $258 apiece, valuing the entire company at approximately $2.76 trillion. OpenAI, which is not (yet) a public company, is estimated to be worth around $500 billion.

Details of the Amazon and OpenAI agreement

As part of the agreement announced on Monday, OpenAI will immediately launch its operations on AWS infrastructure. The company will use hundreds of thousands of Nvidia graphics processing units (GPUs) located in data centers in the United States. While the current deal is primarily for Nvidia chips (including Blackwell models), there is potential to include additional hardware in the future.

Dave Brown, vice president of compute and machine learning services at AWS, described the relationship as “very simple”: OpenAI is an AWS customer that has committed to purchasing the compute power. The infrastructure is designed to support both inference feeding real-time ChatGPT responses and training of next-generation boundary models.

The agreement assumes the use of existing AWS data centers in the initial phase of cooperation, but Amazon will ultimately build additional, completely separate infrastructure for OpenAI. The deal gives OpenAI the flexibility to scale its infrastructure through 2026 and beyond, with the ability to expand as needed over the next seven years, although post-2026 plans have not yet been finalized.

The end of Microsoft's monopoly

This partnership is one of OpenAI's most important moves outside of Microsoft's cloud infrastructure, which was its exclusive provider until earlier this year. Microsoft, which first backed OpenAI in 2019 and invested a total of $13 billion, announced in January that it would no longer be an exclusive supplier, switching to a pre-emption system for new applications.

Microsoft's preferential status expired last week as part of newly negotiated trade terms, giving ChatGPT creator Samowo Altman the freedom to collaborate more broadly with other hyperscalers. OpenAI has previously entered into cloud deals with Oracle and Google, but AWS is by far the market leader in cloud services.

It's worth noting, however, that OpenAI will continue to spend heavily at Microsoft, reaffirming its commitment last week with its announcement to buy Microsoft's Azure cloud services worth $250 billion.

OpenAI's strategic decisions and Bezos's billions more

For OpenAI, the most valuable private AI company, the agreement with AWS is the next step in preparations for a possible stock exchange listing (IPO). Diversifying cloud partners and securing long-term computing power signals both independence and operational maturity. OpenAI CEO Sam Altman recently admitted that an IPO is the “most likely path” given the company's capital needs.

Altman himself commented on the announcement, saying, “Scaling frontier AI requires massive, reliable computing power.” He added that the partnership with AWS strengthens the broad computing system that will power the next era and make advanced artificial intelligence available to everyone.

Finally, let us add that, taking into account the increase in Amazon's share price after the opening of the session, the company's founder Jeff Bezos strengthened his third place in the ranking of the richest people in the world prepared by Forbes. His fortune is estimated at nearly $267 billion and is second only to the value of Larry Ellison's assets ($318.7 billion), based mainly on the valuation of Orlacle, and the value of Elon Musk's fortune ($497 billion), based on the valuation of companies such as Tesla, xAI, Starlink, and SpaceX.

Michal Kubicki

Source: