Tech giant Amazon (AMZN) has completed the final $35 billion portion of its investment in AI firm OpenAI, which brings its total commitment to $50 billion, according to The Information. The deal gives Amazon a much bigger role in OpenAI’s future while also making Amazon Web Services a major provider of the computing power needed to run advanced AI models. The investment comes as OpenAI prepares for a possible public listing.
Interestingly, OpenAI said in February that it had raised $110 billion at a valuation of $730 billion. Amazon contributed $15 billion at the time, while the remaining $35 billion depended on certain conditions being met. The companies never explained those conditions publicly. However, earlier reports suggested that they may have been linked to an OpenAI IPO or the company reaching artificial general intelligence. OpenAI later disclosed that it had confidentially filed to go public.
A Deeper Partnership Between OpenAI and AWS
The investment will also make Amazon the exclusive outside cloud provider for OpenAI Frontier, which is a platform that helps businesses build and manage teams of AI agents. In addition, the companies expanded an earlier $38 billion agreement by another $100 billion over eight years.
As part of that deal, OpenAI has agreed to use two gigawatts of Amazon’s Trainium computing capacity. That commitment includes future versions of the chip, such as Trainium4, which is expected to arrive in 2027. Amazon and OpenAI will also work together on custom AI models that can power Amazon’s consumer-facing products.
Is Amazon a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 37 Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMZN price target of $332.76 per share implies 22.5% upside potential. (See AMZN Stock Forecast).
