Amazon inks $38 billion deal with OpenAI for Nvidia chips

Amazon.com Inc. s cloud unit has signed a $38 billion deal to supply a slice of OpenAI s bottomless demand for computing power. Amazon shares surged....

Amazon.com Inc.’s cloud unit has signed a $38 billion deal to supply a slice of OpenAI’s bottomless demand for computing power. Amazon shares surged.

Amazon Web Services will provide the ChatGPT maker with access to hundreds of thousands of Nvidia Corp. graphics processing units as part of a seven-year deal, the companies announced on Monday.

The arrangement is the latest indication of OpenAI’s transition from research lab to artificial intelligence powerhouse that has reshaped the technology industry. The company has committed to spending $1.4 trillion on infrastructure to build and power its AI models, an unprecedented binge that has prompted concerns about an investment bubble.

For Amazon, which has struggled to compete in the AI age, the deal is an endorsement of its ability to build and run enormous networks of data centers. "As OpenAI continues to push the boundaries of what’s possible, AWS’s best-in-class infrastructure will serve as a backbone for their AI ambitions,” AWS Chief Executive Officer Matt Garman said in a statement.

Amazon shares jumped about 6% in early trading on Monday. Nvidia rose as much as 3%.