OpenAI is in "fluid" talks to raise $10 billion from Amazon — a move that could significantly reduce its long-term reliance on Microsoft’s infrastructure

OpenAI is reportedly in early discussions with Amazon on a potential deal that could push its valuation well beyond $500 billion. A person with close knowledge about the discussions disclosed that the $10 billion deal is "very fluid" on condition of anonymity.

As first reported by The Information, if the deal is finalized, OpenAI could adopt Amazon's Trainium chips to bolster its AI development and advances. The outlet also suggests that the deal could place the ChatGPT maker in a unique position to secure more funding from investors in subsequent funding rounds.

There have been multiple reports suggesting that we're in an AI bubble that's on the precipice of bursting. Microsoft co-founder Bill Gates likened the phenomenon to the dot-com era's hype-driven overvaluations. "There are a ton of these investments that will be dead ends," Gates warned.

Multiple reports indicate that investor interest in AI is fading rapidly, suggesting that some might be compelled to channel their money elsewhere if big tech corporations are unable to establish a clear path to profitability in the multibillion-dollar sector.

At the beginning of the year, OpenAI, alongside its partners, Oracle and SoftBank, unveiled a $500 billion project dubbed Stargate. It is designed to facilitate the construction of data centers across the United States to meet its growing demand for computing power for its sophisticated AI advances.

In September, NVIDIA announced its plans to invest up to $100 billion in OpenAI to facilitate the construction of massive new data centers, which will help meet its high demand for compute.

As you may know, Microsoft and OpenAI recently signed a new definitive agreement that revised some critical elements regarding their partnership, ultimately allowing the ChatGPT maker to evolve into a for-profit venture.

OpenAI successfully transitioned into a Public Benefit Corporation (PBC), which is controlled by the nonprofit arm of the company, the OpenAI Foundation, with an equity stake worth approximately $130 billion in its for-profit arm.

The maker of ChatGPT is no longer constrained by restrictive clauses, allowing it to raise capital and secure additional computing resources from third parties beyond its partnership with Microsoft.

Microsoft AI CEO Mustafa Suleyman indicated that the new agreement earmarks a new shift for the company. It's now free to pursue AGI independently or in collaboration with third parties.

"They now have deals with SoftBank and many others – Oracle – to build more data centers than Microsoft wanted to build for them," added Suleyman. "And so, in return, we then have the right to go develop our own AI."

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