Amazon completes OpenAI investment with additional $35B tranche

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Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]) has completed its investment into OpenAI (OPENAI [https://seekingalpha.com/symbol/OPENAI]) with the additional $35B tranche, The Information reported [https://www.theinformation.com/briefings/amazon-completes-additional-35-billion-investment-openai].

OpenAI said [https://seekingalpha.com/news/4558700-openai-confirms-110b-funding-round-with-50b-from-amazon-and-30b-from-nvidia-softbank] in February that it had raised $110B at a $730B valuation, with $50B coming from Amazon and $30B apiece from Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) and SoftBank (SFTBY [https://seekingalpha.com/symbol/SFTBY]). Led by CEO Andy Jassy, Amazon initially provided OpenAI with $15B in February. The remaining $35B was set to be invested when certain conditions were met.

The companies did not specify what those conditions were at the time, but previous reports indicated the additional money could be tied to an OpenAI IPO or its achievement of artificial general intelligence.

OpenAI disclosed [https://seekingalpha.com/news/4601609-openai-confidentially-files-draft-ipo-to-sec-one-week-after-anthropic] last month that it had confidentially filed to go public.

Also as part of the investment, OpenAI and Amazon signed a deal to have Amazon Web Services be the “exclusive third-party cloud distribution provider for OpenAI Frontier, which enables organizations to build, deploy, and manage teams of AI agents,” OpenAI said. The two companies expanded their previous $38B deal by $100B over 8 years, OpenAI added.

The deal also included OpenAI consuming 2 gigawatts of Trainium capacity through AWS infrastructure and the development of customized models to power Amazon's customer-facing apps. The commitment goes beyond existing Trainium chips and includes the upcoming Trainium4, expected to be delivered in 2027.

OpenAI has since raised [https://seekingalpha.com/news/4570918-openai-raises-3b-from-individual-investors-closes-123b-funding-round-report] additional funding and is now valued at $852B.

Amazon shares jumped more than 15% on Friday due to better-than-expected results, aided by its AWS unit.

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