OpenAI just signed a $38 billion, seven-year cloud deal with Amazon, giving the ChatGPT maker access to a massive new fleet of Nvidia GPUs on Amazon Web Services (AWS), and marking Amazon’s boldest play yet in the generative AI arms race.
The move comes right after OpenAI’s major internal restructuring, which quietly removed Microsoft’s first right of refusal on new infrastructure partnerships, and days after Amazon’s own round of 14,000 layoffs.
“Scaling frontier AI requires massive, reliable compute,” said OpenAI CEO Sam Altman. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”
Under the deal, OpenAI will start using AWS immediately, with full capacity online by the end of 2026, and room to expand further in 2027 and beyond. Amazon plans to deploy hundreds of thousands of Nvidia GB200 and GB300 AI accelerators in data clusters built to train OpenAI’s next wave of models and keep ChatGPT humming.
The deal also throws a lifeline to Amazon’s cloud division, AWS, which had begun to look like the laggard in the AI race compared with Microsoft’s Azure and Google Cloud. The partnership “is a massive vote of confidence,” said analysts, especially after AWS reported surprisingly strong Q3 growth last month.
OpenAI models are already available via Amazon Bedrock, which hosts multiple AI models for business customers. But this new agreement takes things far deeper — essentially embedding OpenAI inside AWS’s AI infrastructure.
Altman’s ambitions are eye-wateringly expensive. He’s said OpenAI plans to spend $1.4 trillion developing about 30 gigawatts of computing resources, roughly the power consumption of 25 million US homes.
That number has rattled environmental advocates. A Lawrence Berkeley National Laboratory study estimates that by 2028, AI data centres could consume up to 12% of all US electricity.
An AP/NORC poll last month found 41% of Americans “extremely concerned” about AI’s environmental impact, another 30% said they’re “somewhat concerned.”
The industry’s trillion-dollar spending spree has some economists warning of an AI bubble. OpenAI has already signed separate cloud deals with Google and committed roughly $300 billion for computing power over five years, numbers that would have seemed unthinkable just two years ago.
Still, the market loved Monday’s announcement: Amazon’s stock jumped 4.7% by late morning in New York.
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