AWS to build out new AI infrastructure for OpenAI in $38B deal

Core Insights - Amazon's shares reached a record high following a $38 billion compute deal with OpenAI, marking a significant development in the tech sector [1] Group 1: Partnership Details - OpenAI has entered into a partnership with Amazon for the first time, utilizing AWS as a hyperscaler for its compute needs, which consumes nearly all capital from a recently closed financing round [2] - The agreement allows OpenAI to access hundreds of thousands of NVIDIA GPUs across multiple US locations, but does not include Amazon's in-house AI chips [2][3] Group 2: Operational Aspects - The deployment is exclusively based on NVIDIA technology and is independent of the infrastructure built for OpenAI's competitor, Anthropic [3] - This contract is already operational and is expected to reach full capacity by next year, distinguishing it from other OpenAI deals that involve future compute resources [3] Group 3: Market Implications - The expiration of Microsoft's right of first refusal last week enabled OpenAI's CEO to sign with Amazon, positioning AWS as a major competitor in the cloud market [4] - Amazon is experiencing significant growth in its AWS business, achieving over 20% growth, the largest increase since 2022, while benefiting from the OpenAI partnership [4]