OpenAI has entered a seven-year agreement worth $38 billion to purchase cloud services from Amazon.com, marking its initial significant effort to enhance its AI goals following last week's restructuring that provided the ChatGPT creator with increased operational and financial autonomy.

The deal, revealed on Monday, will provide OpenAI with access to numerous Nvidia graphics processors to develop and operate its artificial intelligence models. It highlights the AI sector's unquenchable demand for computational resources as businesses compete to develop systems that can match or exceed human intelligence.

OpenAI CEO Sam Altman stated that the startup plans to invest $1.4 trillion to create 30 gigawatts of computing power, which could potentially supply electricity to about 25 million homes in the US.

The agreement represents a significant endorsement for Amazon's cloud division, Amazon Web Services, amid concerns from some investors that it had lagged behind competitors Microsoft and Google in the AI competition. Those concerns were somewhat alleviated by the substantial growth the company announced in the September quarter.

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On Monday, Amazon stock reached a record peak, with the firm poised to increase its market value by almost $140 billion. Microsoft stocks had momentarily declined following the announcement.

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DEPENDABLE COMPUTE "Expanding frontier AI necessitates substantial, dependable compute," stated OpenAI cofounder and CEO Sam Altman. "Our collaboration with AWS enhances the extensive computing ecosystem that will drive this upcoming age and provide advanced AI access to all."

OpenAI is set to start utilizing Amazon Web Services right away, with all intended capacity scheduled to become operational  by the conclusion of 2026 and the opportunity to grow even more in 2027 and later.

Amazon intends to deploy hundreds of thousands of chips, such as Nvidia's GB200 and GB300 AI accelerators, in data clusters designed to enhance ChatGPT's replies and train the upcoming models from OpenAI, according to the companies.

 

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Amazon currently provides OpenAI models through Amazon Bedrock, which presents various AI models for companies utilizing AWS.

OpenAI's extensive reorganization last week shifted it further from its non-profit origins and eliminated Microsoft's initial right of refusal for providing computing services in the new setup.