OpenAI Signs $38 Billion Deal with Amazon to Power AI Growth

Most of us probably don’t pay too much attention to the backend stuff of AI services like OpenAI’s ChatGPT. However, since a lot of AI processing is done in the cloud, choosing a backend service is critical in terms of speed and reliability. Now, it looks like Amazon just got a massive boost from OpenAI via a 38 billion dollar deal.

OpenAI and Amazon sign 38 billion dollar deal

According to reports, both OpenAI and Amazon have signed a seven-year deal worth $38 billion. This will see OpenAI turn to Amazon’s AWS for its cloud services. It would also give OpenAI access to hundreds of thousands of NVIDIA’s GPUs, namely the GB200s and GB300s GPUs, both of which are optimized for low-latency, high-efficiency AI processing.

This is not just good news for OpenAI, but also for Amazon. On the surface, most people associate Amazon with online retail services and maybe smart home tech. However, Amazon is also responsible for powering the backend of the internet via AWS. This is why it was such a huge deal a couple of weeks ago when AWS was hit with an outage, resulting in hundreds of websites and online services going dark.

This investment by OpenAI would also allow Amazon to better compete with Microsoft. In fact, prior to this investment, OpenAI had primarily relied on Microsoft’s Azure cloud computing services. While OpenAI will continue working with Microsoft, it has made a smart play by diversifying. This means in case one side goes down, there’s another to act as backup.

Is OpenAI spending too much?

Right now, the AI industry is booming. Everyone wants a piece of the tech, and we don’t blame them. It’s borderline magical what AI can do, from generating images and hyper-realistic videos on the fly with a few simple prompts. However, critics are warning about AI being a bubble that’s prime to burst.

Many AI companies aren’t actually making money. In fact, it has been estimated that for every $1 the company earns, it loses $3. In the first six months of 2025, OpenAI revealed it generated $4.3 billion in revenue. However, at the same time, it posted a loss of $13.5 billion.

But instead of stepping back, many AI companies are doubling down. In addition to this new deal with Amazon, OpenAI is also investing $1.4 trillion annually in data centers and AI infrastructure through 2030. This begs the question of whether or not the industry in general is spending too much. Maybe this will all work out in the end, but we’ll have to wait and see.