OpenAI is in talks with Amazon for a $10 billion investment from the e-commerce giant, according to a new report, in a deal that could also let the ChatGPT maker use Amazon's AI chips. Reuters, citing an unnamed source familiar with the matter, reports that the funding deal is not yet finalized and discussions remain fluid, but that it would value OpenAI at about $500 billion. OpenAI completed a restructuring in October that was designed to give it more freedom to pursue deals like this to raise capital ...

The deal under discussion could value OpenAI north of $500 billion and see it adopt Amazon’s Trainium chip, a person with knowledge of the matter said, asking to remain anonymous to describe private negotiations. Talks, however, are at a preliminary stage and terms could change, the person added.A deal would mark a win for Amazon’s fledgling semiconductor division. While Nvidia dominates the market for the powerful chips required to create AI platforms, developers such as Meta Platforms Inc. are starting to ...

Core Viewpoint - The article discusses the potential for an investment bubble in artificial intelligence (AI), with Nvidia as a central figure, and the risks associated with the bubble's eventual collapse [1][12]. Group 1: Phases of the Bubble - Investment bubbles have five distinct phases: displacement, boom, euphoria, peak, and collapse, with AI currently in the euphoria stage where irrational investment decisions are prevalent [2][3]. - The peak phase is characterized by rising skepticism among investors about the sustainability of high stock prices, often leading to profit-taking [5][6]. Group 2: Nvidia's Position - Nvidia is positioned at the forefront of the AI revolution, producing high-demand computer chips essential for AI applications, which may suggest resilience against a bubble collapse [7]. - Despite Nvidia's current valuation being below its five-year average price-to-earnings ratio, the company is unlikely to escape the fallout when the AI bubble bursts, as investors tend to sell off all AI-related stocks during a collapse [8][11]. Group 3: Market Impact - Nvidia, Apple, and Microsoft collectively account for 21% of the S&P 500, indicating that a downturn in AI stocks could significantly impact the broader market, potentially leading to a bear market [12]. - The emotional dynamics of greed and fear in the market can lead to substantial losses for even strong companies, as seen in historical examples like Cisco Systems post-dot-com bubble [9][11]. Group 4: Investment Strategy - Investors holding Nvidia shares with significant profits may consider selling a portion of their holdings to lock in gains while still allowing for potential future upside [13].