OpenAI has signed a landmark $38 billion agreement with Amazon Web Services (AWS) to secure the immense computing power needed to train and deploy its next generation of artificial intelligence systems – marking one of the largest technology infrastructure deals ever.
The partnership, announced this week, will give the maker of ChatGPT access to massive fleets of graphics processors – including hundreds of thousands of Nvidia chips – hosted on Amazon’s cloud network. OpenAI will begin using AWS infrastructure immediately, with full deployment expected by the end of 2026 and room for further expansion beyond 2027.
The move represents a significant shift for OpenAI, which has previously relied heavily on Microsoft’s Azure platform to power its models. The deal also underscores the intensifying race among cloud giants for dominance in the lucrative AI infrastructure market. Following the announcement, Amazon shares rose to a record high, briefly valuing the company at more than $2.74 trillion, as investors hailed the deal as a strong endorsement of AWS’ capabilities.
Sam Altman, CEO of OpenAI, said the partnership is critical to scaling what he called “frontier AI.” “Scaling frontier AI requires massive, reliable computing power,” he said. “Our partnership with AWS strengthens the broad computing ecosystem that will power this next era and make advanced AI accessible to all.”
For Amazon, the deal is a strong vote of confidence in AWS at a time when some analysts have questioned whether the cloud division is falling behind rivals Microsoft and Google in AI competition. The agreement ensures that AWS continues to play a central role in the next phase of AI development – an area now characterized by unprecedented hardware and capital requirements.
Industry analysts said the scope of the contract highlights how the economics of artificial intelligence have changed. Paolo Pescatore, analyst at PP Foresight, described it as “an extremely significant deal and a clear endorsement of AWS’ computing capabilities.” The deal also reflects that AI development has become a game of access – not just to algorithms and talent, but also to computing power on a colossal scale.
OpenAI is working on a global scale to secure this capacity. In addition to the Amazon deal, the company has signed agreements with Nvidia, AMD and Oracle to access more powerful processors and cloud data centers. Altman previously said the company plans to invest about $1.4 trillion in computing resources in the coming years, targeting 30 gigawatts of infrastructure – enough to power about 25 million American homes.
The deal also follows OpenAI’s internal restructuring with its largest backer, Microsoft, which valued the company at $500 billion and paved the way for its evolution from a nonprofit research firm to a for-profit company. The restructuring transferred some control to a new nonprofit foundation that holds shares in OpenAI’s commercial arm, while also removing Microsoft’s right of first refusal on the provision of its computing services – clearing the way for the new partnership with Amazon.
However, the deal has reignited debate over whether the AI sector is entering a speculative bubble. Nvidia, whose chips power most AI systems, last week became the world’s first $5 trillion company, with a market value now about half the size of the entire European benchmark stock index. Analysts warn that the rapid rise in valuations combined with huge capital expenditures by AI developers could prove difficult if promised productivity gains do not materialize.
Despite these concerns, the OpenAI-Amazon deal sends a clear message: the future of AI will be shaped by those with the most comprehensive computing resources. As the cloud titans fight for position, the partnership not only secures OpenAI’s access to power on an unprecedented scale, but also solidifies AWS’s position at the heart of the global AI infrastructure boom.
For now, Altman doesn’t seem to be deterred by the warnings of overheating. Its stated goal is to add one gigawatt of computing capacity every week – each unit incurring an estimated capital cost of more than $40 billion. If this pace continues, OpenAI’s collaboration with Amazon may be just the start of an even larger technological arms race that will redefine the way artificial intelligence is built, trained and deployed worldwide.
