Amazon.com stock trimmed its slide to around 0.8% on Thursday afternoon, recovering slightly within a wider pullback across technology shares, following reports that the company is in discussions to make a major investment in artificial intelligence startup OpenAI.
According to people familiar with the matter, the potential commitment would be as high as $50 billion and would position Amazon as the largest contributor to OpenAI's current fundraising effort, which reportedly is aiming to raise up to $100 billion in new capital. Those same sources said the round could place a valuation on the ChatGPT developer of roughly $830 billion.
Sources also indicated that Amazon Chief Executive Officer Andy Jassy is personally handling talks with OpenAI Chief Executive Officer Sam Altman. The discussions are ongoing, and the final configuration of any agreement could still change, the reports said. The talks take place as major technology companies continue to maneuver for advantage in the fast-evolving AI arena.
The coverage further noted that Japanese conglomerate SoftBank is engaged in separate discussions to invest as much as $30 billion in OpenAI, which would add to SoftBank's existing stake in the company.
Amazon has previously shown interest in generative AI, having invested in Anthropic, an OpenAI competitor. Observers view a prospective OpenAI investment of the reported size as a marked escalation of Amazon's financial commitment to artificial intelligence technology.
Outlook and market context
Market participants are watching how the reports affect investor sentiment toward both Amazon and the broader technology sector. The reported talks underscore how major technology companies are seeking large-scale exposure to generative AI capabilities through substantial capital commitments.
At the same time, the situation remains fluid - the discussions are described as active negotiations rather than a completed transaction, and details about the structure and timing of any deal are not finalized.
Takeaways
- Amazon is reportedly negotiating to invest up to $50 billion in OpenAI, which would make it the largest participant in the current fundraising round.
- The fundraising round is seeking up to $100 billion and could value OpenAI at about $830 billion.
- SoftBank is also reportedly in talks to commit up to $30 billion, and Amazon has previously invested in OpenAI competitor Anthropic.