After signing deals to buy hundreds of billions of dollars in computing power from the chipmakers Nvidia and AMD and the cloud computing company Oracle, OpenAI has reached a multi-billion-dollar agreement with the tech giant Amazon.
OpenAI said on Monday that it had agreed to purchase $38 billion in cloud computing services from Amazon over the next seven years. The additional computing power will help OpenAI build and deploy its artificial intelligence technologies, including the chatbot ChatGPT.
From 2019 to 2023, OpenAI purchased all of its computing power from Microsoft as part of a complex partnership between the two companies. Their contract stipulated that OpenAI must buy solely from Microsoft, its primary investor, unless Microsoft gave approval for computing deals with other companies.
Over the past 18 months, as OpenAI complained that it was not able to get all the computing power it needed from Microsoft, the tech giant allowed the start-up to sign separate deals with two other cloud companies.
Then, last week, Microsoft and OpenAI renegotiated their contract, so that OpenAI was free to purchase services from any cloud computing company without Microsoft’s approval.
Coming just days later, OpenAI’s $38 billion agreement with Amazon is part of the A.I. company’s fast-speed effort to expand the already enormous pool of computing power that fuels its ambitions. OpenAI is also working to build new computer data centers with Oracle, the Japanese conglomerate SoftBank, the United Arab Emirates and others.
To help fund the construction of the data centers, the company has also inked a complex set of deals with chipmakers Nvidia, AMD and Broadcom.
As OpenAI secures hundreds of billions of dollars in additional computing power, it is racing to keep pace with many of the tech industry’s largest companies. Over the last year, Amazon, Google, Meta and Microsoft committed a total of than $360 billion in capital expenditures.
As both OpenAI and these tech giants increase their spending, some financial analysts and tech historians are concerned that the tech industry is heading toward a dangerous bubble. Artificial intelligence remains an unproven and expensive technology that could take years to mature. Though OpenAI, the market leader, is pulling in billions of dollars in yearly revenue, it is not profitable.
(The Times has sued OpenAI and Microsoft, claiming copyright infringement of news content related to A.I. systems. The two companies have denied the suit’s claims.)
Cade Metz is a Times reporter who writes about artificial intelligence, driverless cars, robotics, virtual reality and other emerging areas of technology.
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