Amazon completes $50bn investment in OpenAI

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Amazon has completed a $50bn investment in OpenAI, building a roughly 5 per cent stake in the ChatGPT maker ahead of a public listing expected next year.

Amazon invested $15bn into the AI company led by Sam Altman in February as part of a broader commercial partnership. The ecommerce and cloud giant said it would invest a further $35bn if certain milestones, including a public offering or a breakthrough in AI, were achieved.

The company has now invested the full sum, providing the lossmaking start-up with fresh firepower despite neither of those conditions being met, according to disclosures in its financial results published on Friday.

The investment more closely binds the companies, adding a large equity stake to a complex array of commercial agreements covering chips and other computing resources as well as cloud services.

It also bolsters OpenAI’s ability to train new AI models, a hugely costly task viewed as essential to remain competitive with other frontier labs such as Anthropic, Google and Chinese rivals.

The $852bn start-up received the final tranche this week, taking Amazon’s position to roughly 5 per cent, according to a person with knowledge of the deal.

Amazon agreed to invest the full amount after OpenAI renegotiated a contract with Microsoft in April, opening the way for other cloud providers including AWS to serve OpenAI, they added.

Prior to that renegotiation, the FT reported that Microsoft was weighing legal action for a potential breach of contract related to OpenAI’s deal with Amazon.

The Seattle-based group has also backed rival Anthropic and is leveraging the two companies to drive uptake of its own Trainium chips — which compete with Nvidia’s market-leading hardware and rival technology including Google’s TPU. Amazon is also seeking to ensure the two AI labs’ models are available for its cloud customers.

Amazon has committed as much as $33bn in the Claude maker, of which $18bn has been invested to date, it disclosed on Friday. Amazon declined to comment on the size of its stake in OpenAI.