Post by : Bianca
Haleem
OpenAI has signed a $38 billion agreement with Amazon to operate its AI systems on Amazon Web Services (AWS) across U.S. data centres, marking a significant change in the infrastructure strategy of the AI firm. The move follows OpenAI's recent adjustment of its long-standing cloud relationship with Microsoft.
Under the terms, OpenAI will tap into "hundreds of thousands" of Nvidia AI accelerators hosted by AWS. The arrangement is designed to let the company scale services — including ChatGPT — to satisfy surging usage worldwide. Amazon's stock rose about 4% after the announcement, signalling investor approval.
The timing coincides with OpenAI's organisational shift: regulators in California and Delaware have approved a new corporate structure that makes it easier for the company to raise funds and pursue profit. Originally founded as a nonprofit, OpenAI has been investing heavily in compute infrastructure — reportedly more than $1 trillion — through collaborations with the likes of Oracle, SoftBank and chip suppliers such as Nvidia, AMD and Broadcom.
Large-scale AI models demand vast computing resources, and OpenAI has publicly acknowledged the urgency of expanding capacity. Amazon says OpenAI will begin using AWS resources immediately, with the majority of capacity expected to be in place by the end of 2026 and with scope to grow further into 2027.
The deal also strengthens Amazon’s position in the AI ecosystem; AWS already provides services to competitors like Anthropic. The agreement highlights intensifying competition among cloud providers as organizations worldwide accelerate AI adoption and compete for advanced infrastructure.
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