OpenAI $38B cloud deal offers ‘important validation for AWS,’ says BofA

After OpenAI announced that it has committed $38B of cloud spend with Amazon Web Services (AMZN) for access to “hundreds of thousands” of Nvidia (NVDA) Blackwell chips in a deal that gives OpenAI the option to “expand to tens of millions of CPUs” for Agentic AI workloads, BofA tells investors that the deal is “an important validation for AWS on two fronts.” First, this announcement supports the view that the AWS capacity ramp will enable accelerating AWS revenue growth. Second, the dual AI chip strategy positions AWS to meet diverse client demand. With the two largest AI companies in OpenAI and Anthropic now using a mix of first-party and third-party chips on AWS, BofA thinks the OpenAI deal highlights Amazon’s ability to support customers’ varying performance and cost needs, says the analyst, who maintains a Buy rating and $303 price target on Amazon shares.