WASHINGTON, Nov 3 (KUNA) -- OpenAI has hammered out a deal to buy USD 38 billion worth of capacity from Amazon Web Services, its first contract with the leader in cloud infrastructure and the latest sign that the USD 500 billion artificial intelligence startup is no longer reliant on Microsoft.
Under the agreement announced on Monday, OpenAI will immediately begin running workloads on AWS infrastructure, tapping hundreds of thousands of Nvidia's graphics processing units (GPUs) in the US, with plans to expand capacity in the coming years.
Amazon stock climbed about 5 percent following the news.
The first phase of the deal will use existing AWS data centers, and Amazon will eventually build out additional infrastructure for OpenAI.
"It's completely separate capacity that we're putting down," said Dave Brown, vice president of compute and machine learning services at AWS. "Some of that capacity is already available, and OpenAI is making use of that." OpenAI has been on a deal-making spree of late, announcing roughly USD 1.4 trillion worth of buildout agreements with companies including Nvidia, Broadcom, Oracle and Google.
Until this year, OpenAI had an exclusive cloud agreement with Microsoft, which first backed the company in 2019 and has invested a total of USD 13 billion. In January, Microsoft said it would no longer be the exclusive cloud provider for OpenAI, and was moving to an arrangement where it would have right of first refusal for new requests.
Last week, Microsoft's preferential status expired under its newly negotiated commercial terms with OpenAI, freeing the ChatGPT creator to partner more widely with the other hyperscalers. Even before that, OpenAI forged cloud deals with Oracle and Google, but AWS is by far the market leader.
"Scaling frontier AI requires massive, reliable compute," OpenAI CEO Sam Altman said in Monday's release. "Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone." "The breadth and immediate availability of optimized compute demonstrates why AWS is uniquely positioned to support OpenAI's vast AI workloads," AWS CEO Matt Garman said in the release.
In its earnings report last week, Amazon reported more than 20 percent year-over-year revenue growth at AWS, beating analyst estimates. But growth was faster at Microsoft and Google, which reported cloud expansion of 40 percent and 34 percent, respectively. (end) rsr.ibi