Amazon in talks to invest $10bn in developer of ChatGPT

Investment and Valuation - Amazon is in discussions to invest over $10 billion in OpenAI, potentially raising OpenAI's market valuation above $500 billion [1] - OpenAI's spending commitment on compute resources is projected to be $1.4 trillion over the next eight years, significantly exceeding its reported annual revenues of $13 billion [4] - OpenAI is considering an initial public offering that could value the company at up to $1 trillion [5] Strategic Partnerships - Amazon's investment would assist OpenAI in fulfilling its commitments to rent cloud capacity, particularly from Amazon Web Services [2] - OpenAI plans to utilize Amazon's Trainium chips, which compete with offerings from Nvidia and Google [3] - OpenAI has also engaged in transactions with Nvidia, where it will pay for chips while Nvidia invests in non-controlling shares of OpenAI [6] Competitive Landscape - OpenAI's CEO has issued a "code red" alert to address competition from Google, particularly following updates to Google's Gemini AI tool [7] - Discussions between Amazon and OpenAI reportedly include exploring commercial opportunities, such as selling a corporate version of ChatGPT to Amazon [7] Additional Funding and Developments - OpenAI's main backer, Microsoft, holds a stake of approximately 27% in the company, which was part of a deal valuing OpenAI at $500 billion [4] - OpenAI has secured a deal with Oracle for $300 billion to build data centers across several states, with OpenAI expected to repay a similar amount for usage [5]