Amazon Eyes $10B OpenAI Investment at $500B Valuation
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New reports claim that Amazon is in talks to invest in ChatGPT-maker OpenAI in a potential deal that could push the value of the artificial intelligence company at more than $500 billion.
The claim comes from an unnamed source familiar with the matter, and it was reported earlier today, December 17, by Reuters.
Amazon and OpenAI announced their collaboration earlier this month when AWS entered into a multi-year strategic partnership with the AI firm. However, things could escalate to the next level if Amazon decides to invest $10 billion in OpenAI, as insiders claim.
The source said that the talks between the two companies are currently still “very fluid,” but the potential deal highlights the AI sector’s constant demand for massive amounts of computing power, as leading firms race to build systems that could rival, or even surpass, human intelligence.
A Major Shift To AI Continues
The allure of AI and its potential for both profit and technological edge has already attracted a number of major names, including some of the leaders of various industries. Firms like Nvidia and Oracle have announced entering AI deals with OpenAI, each of which was worth billions of dollars. Even OpenAI’s previous deal to buy cloud services from Amazon was valued at $38 billion.
Even so, investors still remain on guard and are carefully monitoring developments for signals that demand for AI is tailing off or that the massive spending is not paying off as anticipated. Many are calling the current AI craze a bubble and are predicting that it will burst before long.
On the other hand, deals and discussions, such as the one Amazon and OpenAI are in right now, signal that the interest in AI is still strong, and that all of these tech, retail, and other industry giants see great potential in it.
Amazon’s deal comes at a time when OpenAI is laying the groundwork for an IPO that could result in the company’s valuation skyrocketing to $1 trillion. This, in itself, is an interesting development, highlighting OpenAI’s ability to partner widely after distancing itself from its non-profit roots and settling its previous deal with Microsoft.
The source commented on this as well, saying that the Microsoft deal makes OpenAI a public benefit corporation that is controlled by a non-profit with a stake in OpenAI’s financial success, which removes major constraints on the company’s ability to raise capital and secure computing resources.
