Amazon Stock Jumps on $38 Billion OpenAI Deal. What We Know.

Amazon Web Services will provide infrastructure for OpenAI’s artificial intelligence workloads. (Getty Images for Amazon Web Services)

OpenAI and Amazon.com have reached a $38 billion agreement for Amazon Web Services to provide infrastructure for the ChatGPT maker’s artificial-intelligence workloads. The partnership will begin immediately and covers the next seven years, Amazon announced Monday.

Amazon stock was up 4.9% Monday morning. Shares of Microsoft , which has a longstanding ownership stake in OpenAI, were up 0.5%.

“OpenAI is accessing AWS compute comprising hundreds of thousands of state-of-the-art Nvidia GPUs,” Amazon said in the blog post. “AWS’s leadership in cloud infrastructure combined with OpenAI’s pioneering advancements in generative AI will help millions of users continue to get value from ChatGPT.”

Amazon said the agreed upon capacity would be deployed by the end of 2026 with the ability for OpenAI to expand the deal in 2027 and beyond.

“Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone,” OpenAI CEO Sam Altman said in the release.

Asked for more details of the deal, an AWS spokesperson Elizabeth Evarts said: “OpenAI has committed $38B to AWS for a 7-year contract, and otherwise we are not disclosing more details on terms of the agreement.”

The new Amazon-OpenAI partnership is smaller in size than some deals OpenAI has completed this year. Last week, OpenAI and Microsoft announced the AI start-up would purchase an additional $250 billion of Azure cloud services from Microsoft in the future. OpenAI has also agreed to purchase $300 billion worth of cloud capacity from Oracle over roughly five years, the Wall Street Journal reported in September.

Write to Nate Wolf at nate.wolf@barrons.com