Amazon has signed a $38 billion deal with OpenAI that repositions its cloud division, Amazon Web Services (AWS), as a central player in the rapidly expanding AI infrastructure market. The agreement, which follows recent partnerships between OpenAI and other major cloud providers, underscores Amazon’s determination to catch up after losing ground to Microsoft Azure and Google Cloud.
The partnership gives OpenAI access to AWS’s powerful cloud computing resources and custom Trainium chips, further validating Amazon’s AI ecosystem. Although smaller than Microsoft’s $250 billion and Oracle’s $300 billion OpenAI deals, analysts view Amazon’s move as a strategic breakthrough that could drive sustained growth.
“This is the first credible step showing Amazon is no longer an AI laggard,” said BMO Capital’s Brian Pitz, noting that the deal could expand AWS’s backlog by 20% this quarter. Following the announcement, Amazon shares surged 5%, hitting record highs.
The agreement caps off a year of aggressive investment from CEO Andy Jassy, who is reshaping the company’s management to streamline AI development. Amazon’s capital expenditures are expected to reach $125 billion in 2025, matching Microsoft’s and surpassing Alphabet’s $93 billion.
The deal, along with Amazon’s new $11 billion “Project Rainier” AI data center, marks a renewed push to compete at scale in the next era of cloud computing and generative AI.
