Amazon In Talks To Invest $10 Billion In OpenAI; Deal Involving Trainium Chips: Report

Amazon is holding talks to make a significant investment in OpenAI, the company behind ChatGPT, in a move that could push the AI firm's valuation beyond $500 billion.

A source familiar with the matter informed Reuters on Tuesday that negotiations are ongoing, with the possibility of Amazon committing $10 billion or more, though outcomes remain uncertain, ranging from a substantial investment to none at all.

Fluid Negotiations and Possible Investment Scale

The discussions between Amazon and OpenAI remain "very fluid," the source told Reuters, noting that details could shift significantly.

Amazon might contribute around $10 billion, but the private nature of the talks led the source to speak on condition of anonymity.

Context of OpenAI's Future Plans

This development occurs as OpenAI prepares for a potential initial public offering that could reach a $1 trillion valuation, Reuters reported earlier in October.

OpenAI's Evolving Partnerships Post-Microsoft Deal

The potential partnership underscores OpenAI's expanded flexibility in forming alliances following its transition from non-profit origins and resolution of arrangements with Microsoft, the source indicated to Reuters.

That Microsoft agreement restructured OpenAI into a public benefit corporation overseen by a non-profit holding a financial interest, eliminating key restrictions on fundraising and access to computing power.

Microsoft currently owns a 27% stake in OpenAI and maintains exclusive rights to distribute its models to cloud clients.

Details on Technology and Broader Implications

The Information, credited with initially breaking the story, reported that OpenAI intends to incorporate Amazon's Trainium chips, rivals to those from Nvidia and Google.

Reuters noted that OpenAI and Microsoft declined to comment immediately on The Information's reporting.

According to The Information, funding from Amazon might open doors to a larger investment round with other participants.

The report also mentioned OpenAI's interest in offering an enterprise edition of ChatGPT to Amazon, though it's uncertain if any agreement would involve embedding ChatGPT, capabilities like AI-enhanced shopping tools,  into Amazon's applications.

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