OpenAI is in advanced talks with Amazon to secure a potential investment of up to $10 billion, according to CNBC, with the deal also expected to include a major agreement for OpenAI to use Amazon Web Services’ (AWS) AI chips. The discussions are still fluid and not guaranteed, but if finalized, the investment could value OpenAI at over $500 billion, Bloomberg reported. This would mark a significant expansion of Amazon’s footprint in the generative AI sector, where it has already invested $8 billion in Anthropic, OpenAI’s chief rival. The talks come after OpenAI completed a major restructuring in October, transitioning to a for-profit entity that grants it greater flexibility to pursue partnerships and raise capital beyond Microsoft. While Microsoft remains OpenAI’s largest backer—with over $13 billion invested since 2019—it no longer holds a right of first refusal to supply OpenAI’s computing infrastructure. This shift allows OpenAI to collaborate with third-party providers, including AWS, Nvidia, AMD, and Broadcom. Amazon’s growing interest in AI is underscored by its ongoing development of custom AI chips. AWS has been designing AI-specific hardware since 2015, launching its Inferentia chips in 2018 and unveiling the latest generation of Trainium chips earlier this month. These chips are critical for training large language models and meeting surging demand for compute power. Amazon’s investment in OpenAI would strengthen its ecosystem by tying a leading AI lab to its cloud and chip offerings. This potential deal fits a broader trend of circular investments in the AI industry. Companies like OpenAI are investing in chipmakers and cloud providers, which in turn supply them with infrastructure—creating a self-reinforcing cycle. For example, OpenAI invested $350 million in CoreWeave, which used the funds to purchase Nvidia chips. Those same chips power OpenAI’s models, boosting CoreWeave’s revenue and increasing OpenAI’s stake value. In October, OpenAI also acquired a 10% stake in AMD and committed to using its AI GPUs, while signing a $38 billion cloud computing agreement with AWS—the first major contract between OpenAI and Amazon’s cloud arm. The $38 billion AWS deal, announced in November, reflects OpenAI’s massive infrastructure needs. The company has made over $1.4 trillion in infrastructure commitments recently, including partnerships with Nvidia, AMD, and Broadcom. These agreements are essential as AI training demands skyrocket. OpenAI’s restructuring also included a secondary share sale worth $6.6 billion in October, allowing employees and investors to cash out at a $500 billion valuation. This move signaled confidence in OpenAI’s commercial viability and its ability to attract diverse investors. Amazon’s potential investment would signal a strategic pivot. While it has backed Anthropic as a counterbalance to Microsoft’s OpenAI dominance, it may now be seeking a more direct role in the AI future. The move would also position Amazon to compete more aggressively with Microsoft and Google in the AI infrastructure space. Despite the momentum, both OpenAI and Amazon have declined to comment on the talks. The outcome remains uncertain, but if completed, the deal could reshape the AI landscape—solidifying Amazon’s role as a key player in the generative AI supply chain and giving OpenAI access to critical compute resources while diversifying its investor base.