OpenAI Inc. Nvidia Inc., SoftBank Group Corp. and Amazon.com Inc. has raised $110 billion in its largest funding round to date, led by . The Sam Altman-led company is valued at $730 billion ahead of a potential IPO.
Amazon.com Inc. is investing $50 billion in a financing round, the largest amount the e-commerce giant has ever invested in a company, OpenAI said on Friday. SoftBank Group Corp and Nvidia Corp each invested $30 billion, the company said. The company’s new $730 billion valuation does not include the funds raised. After funding, it is now worth $840 billion.
OpenAI and rival Anthropic PBC have stepped up fundraising this year to support expensive bets on chips and data centers to support their artificial intelligence software. Increasingly, the two AI startups have tapped an overlapping group of venture funds and Big Tech investors.
The major investment from Amazon, a longtime Anthropic supporter, also strengthens its relationship with OpenAI. As part of the agreement, OpenAI will use Amazon’s line of in-house AI chips, called Trainium, and jointly develop optimized models for Amazon’s own engineering teams. OpenAI will also spend an additional $100 billion on Amazon Web Services over the next eight years. In November the two companies announced a deal under which the model builder will access approximately $38 billion in AWS services over seven years.
“Amazon can give us a lot in terms of new demand and opportunities in the market,” OpenAI Chief Executive Officer Sam Altman said in an interview with CNBC on Friday. Amazon CEO Andy Jassy said the deal “will deliver good returns for Amazon over the long term.”
Microsoft Corp., one of OpenAI’s biggest previous supporters and formerly an exclusive infrastructure partner, said its relationship with the developer remains strong. “Today’s announcements do not in any way change the terms of the Microsoft and OpenAI relationship,” the companies said in a joint statement Friday.
Anthropic raised $30 billion in a funding round earlier this month from investors including Nvidia and Microsoft. The financing valued Anthropic at $380 billion, including the money raised.
The funding commitments mark the latest example of circular financing deals between leading AI startups and suppliers of chips and cloud computing. The aim of these alliances is to ensure that the AI sector can meet its vast infrastructure needs, but the risk is that such deals could exacerbate losses if demand for AI fails to match today’s high expectations.
Altman downplayed the risks of such an arrangement in a CNBC interview.
“I understand where the concern comes from,” Altman said. “This only makes sense if new revenue flows throughout the entire AI ecosystem.” He said much of his effort is trying to get more computing capacity to meet demand for ChatGPT and OpenAI’s other products.
This is a developing story. more to come.