Dj Infrastructure Investors Pursue New 'Powered-Land' Strategies

By Adam Clark

Amazon.com could be set to make a huge investment in ChatGPT-developer OpenAI. It's a move that would have big ramifications across the cloud-computing and semiconductor sectors.

Amazon is in talks to invest up to $50 billion in OpenAI, as part of an overall fund-raising round to raise up to $100 billion, The Wall Street Journal reported late Thursday. Amazon and OpenAI didn't immediately respond to requests for comment from Barron's early on Friday.

Such a large investment would be a major vote of confidence in OpenAI and would likely boost a host of stocks dependent on its spending, including cloud-computing providers Oracle and CoreWeave. OpenAI is projected to spend nearly $500 billion over the next four years to power its artificial-intelligence technology and is considering a public listing as soon as the fourth quarter of this year, according to the WSJ.

However, the major question will be what conditions Amazon will seek in return for its investment. A partnership between the two could mean OpenAI making greater use of Amazon's cloud-computing unit, Amazon Web Services, in future.

Previous reporting suggested a deal between the two parties would be tied to OpenAI's use of Amazon's in-house Trainium chips, according to technology-focused The Information.

That could be a source of concern for chip makers Nvidia and Broadcom, which currently provide processors for OpenAI. It could also raise questions about OpenAI's future reliance on Microsoft, which has previously been the company's major financial backer and a significant provider of cloud-computing capacity.

OpenAI and Amazon are already partners. They reached a $38 billion agreement for Amazon Web Services to provide infrastructure for AI workloads in November. That deal calls for Nvidia chips rather than Amazon's Trainium processors.

Nvidia and Microsoft are also in talks to invest in OpenAI's funding round, with Nvidia considering putting in up to $30 billion and Microsoft mulling a less than $10 billion investment, according to The Information.

Barron's owner News Corp has a content-licensing partnership with OpenAI.

Write to Adam Clark at adam.clark@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.