Introduction to OpenAI’s New Partnership
On Monday, OpenAI announced it has signed a seven-year, $38 billion deal to buy cloud services from Amazon Web Services to power products like ChatGPT and Sora. It’s the company’s first big computing deal after a fundamental restructuring last week that gave OpenAI more operational and financial freedom from Microsoft.
The Partnership Details
The agreement gives OpenAI access to hundreds of thousands of Nvidia graphics processors to train and run its AI models. “Scaling frontier AI requires massive, reliable compute,” OpenAI CEO Sam Altman said in a statement. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.” OpenAI will reportedly use Amazon Web Services immediately, with all planned capacity set to come online by the end of 2026 and room to expand further in 2027 and beyond.
Impact on the Market
Amazon plans to roll out hundreds of thousands of chips, including Nvidia’s GB200 and GB300 AI accelerators, in data clusters built to power ChatGPT’s responses, generate AI videos, and train OpenAI’s next wave of models. Wall Street apparently liked the deal, because Amazon shares hit an all-time high on Monday morning. Meanwhile, shares for long-time OpenAI investor and partner Microsoft briefly dipped following the announcement.
Massive AI Compute Requirements
It’s no secret that running generative AI models for hundreds of millions of people currently requires a lot of computing power. Amid chip shortages over the past few years, finding sources of that computing muscle has been tricky. OpenAI is reportedly working on its own GPU hardware to help alleviate the strain. But for now, the company needs to find new sources of Nvidia chips, which accelerate AI computations. Altman has previously said that the company plans to spend $1.4 trillion to develop 30 gigawatts of computing resources, an amount that is enough to roughly power 25 million US homes, according to Reuters.
Conclusion
The partnership between OpenAI and Amazon Web Services is a significant step forward for the development of AI technology. With access to hundreds of thousands of Nvidia graphics processors, OpenAI will be able to train and run its AI models more efficiently, leading to advancements in areas such as natural language processing and computer vision. As the demand for AI computing power continues to grow, it will be interesting to see how this partnership evolves and how it impacts the future of AI development.
FAQs
Q: What is the value of the deal between OpenAI and Amazon Web Services?
A: The deal is worth $38 billion over seven years.
Q: What will OpenAI use the Amazon Web Services for?
A: OpenAI will use the services to power products like ChatGPT and Sora, and to train and run its AI models.
Q: How many Nvidia graphics processors will OpenAI have access to?
A: OpenAI will have access to hundreds of thousands of Nvidia graphics processors.
Q: What is the expected outcome of this partnership?
A: The partnership is expected to lead to advancements in AI technology, including natural language processing and computer vision.
Q: How will this partnership impact the market?
A: The partnership has already had a positive impact on Amazon shares, which hit an all-time high after the announcement.
