Giants conspire for the future of AI: Amazon (AMZN.US) plans to inject $10 billion into OpenAI to accelerate the challenge of Nvidia (NVDA.US) chip hegemony

The Zhitong Finance App learned that according to reports, OpenAI is in investment negotiations with Amazon (AMZN.US), plans to raise an amount of 10 billion US dollars or more, and is considering using Amazon's AI chips.

Previously, OpenAI announced last month that it would spend 38 billion US dollars over the next seven years to rent server resources from AWS, a cloud computing subsidiary of Amazon.

If this financing is secured, it will help OpenAI fulfill its long-term commitment to leasing servers to at least five cloud service providers (including AWS). These computing resources are being used to develop its artificial intelligence (AI) models.

Three people familiar with the matter said that the two sides have also discussed the possibility of commercial cooperation. According to reports, negotiations began after OpenAI completed the corporate restructuring in October last year — the company paved the way for future public listings by converting its interests into traditional shares.

Notably, people familiar with the matter pointed out that the two sides have negotiated the use of Amazon's AI chip. If an agreement is reached, Amazon's self-developed AI training chip Trainium will welcome new customers, and will also help the online retail giant expand its influence in the AI field and compete with NVDA.US (NVDA.US).

Earlier, due to news that Meta (META.US) was considering adopting Google (GOOGL.US)'s high-performance AI semiconductor TPU, discussions about ASIC chips that might threaten Nvidia's position caused the latter's stock price to drop for a while.

Also, as an alternative to Nvidia's AI chips, negotiations between Amazon and OpenAI may further spark a buzz in the market. Analysts pointed out that the Trainium chip is the strategic key for Amazon to stand out in the AI field, complementing its cloud computing business. Although AWS is the largest provider of computing power leasing and data storage services, its market position among AI developers has yet to be strengthened due to fierce competition from companies such as Microsoft (MSFT.US) (Microsoft is one of the main investors in OpenAI).

Amazon wants to attract business customers through a more cost-effective advantage. The company said that compared to market-leading Nvidia GPUs, Trainium chips can drive the intense computation required for AI models at a lower cost and with greater efficiency.

In the agreement reached last month, OpenAI clearly stated that it will obtain computing power support for Nvidia's AI chips through AWS, but it was also mentioned that it is still possible to integrate more chip solutions in the future.

However, the negotiations are still in the early stages, and the specific terms may change. Representatives from OpenAI and Amazon declined to comment.

In a recent employee stock sale, OpenAI's valuation reached 500 billion US dollars, once surpassing Elon Musk's SpaceX to become the highest-valued startup in the world.

This rapid rise highlights a boom in investment around AI technology leaders. The technology is believed to have the potential to reshape the industry and the economy. But in recent months, Wall Street analysts have warned of the risk of a potential bubble, in part because some investment deals are circular — companies invest heavily in potential customers to maintain their spending on their own products.