Why OpenAI’s $38B Cloud Fling with Amazon Looks Suspiciously Like an IPO Warm-Up…

“We’ve decided to start seeing other clouds.” -Sam Altman’s text to Bill Gates (while lying in bed with Jeff Bezos)

In the biggest breakup since Brad Pitt  and Jennifer Anniston, OpenAI just told Microsoft, “It’s not you, it’s the compute.”

This morning, OpenAI inked a $38 billion deal with Amazon Web Services, officially making Jeff Bezos’ empire its new cloud plug. For context, that’s one of the largest compute deals ever… and it marks OpenAI’s first time shacking up with AWS after years of monogamy with Microsoft Azure.

(Source: Reuters)

Sam “I don’t do it for money” Altman’s statement was exactly what you’d expect: “Scaling frontier AI requires massive, reliable compute.” Translation: “We need a backup plan in case Satya Nadella changes the Wi-Fi password.”

Until recently, Microsoft was OpenAI’s legal guardian… funneling $13 billion into the ChatGPT maker and securing exclusive hosting rights. But after new terms kicked in this month, OpenAI’s free to “see other hyperscalers.”

And just like that newly divorced mother of 4 on your Facebook feed, Amazon didn’t waste any time looking for love. The deal gives OpenAI access to hundreds of thousands of Nvidia GPUs and AWS will even build out custom data centers for them by 2026.

In return, Amazon stock popped 5% on the news… because any press release involving OpenAI and Sammie boy = $$$ signs to investors.

Between this and prior deals with Oracle, Google, and Nvidia, OpenAI has now committed roughly $1.4 trillion to future infrastructure… about two-thirds the size of Canada’s entire economy. Critics call it another bubble. Fans call it the entry fee to the age of superintelligence. Either way, someone’s accountants are developing carpal tunnel from typing zeroes all day.

And don’t feel too bad for Bill Gates and Co, Microsoft’s still in the picture… OpenAI reaffirmed it’ll drop another $250 billion on Azure capacity. So it’s not a total divorce… just an open relationship with a $38 billion side quest.

The timing’s a little too convenient. OpenAI just ditched its nonprofit training wheels (cue Elon’s next rage tweet) and started dressing up for the IPO ball. CFO Sarah Friar’s been all but winking at Wall Street, and nothing says “we’re ready for prime time” like adding Amazon to your cloud situationship list. The press release says “compute deal,” but this is really ChatGPT practicing its IPO smile.

For Amazon, this is leverage at its finest. They don’t need to win the AI arms race… they just need to own the factory that forges the weapons.

And if that’s not enough irony, a few days after OpenAI plugged itself into AWS, Elon’s out here rallying a $97 billion posse to buy… OpenAI itself. That is, when he’s not hyping the Roadster on Joe Rogan’s podcast like it’s still 2017.

At the time of publishing this article, Stocks.News holds positions in Amazon, Microsoft, Meta, and Google as mentioned in the article.