11 ms·
OpenAI signs $38B cloud computing deal with Amazon
- xnx 1y agoAll these stories should have the dollar amounts in quotes as they are farcical.
- thelastgallon 1y agoHow much is Amazon 'investing' in OpenAI for this deal?
- throw03172019 1y agoWill OpenAI models be available in Bedrock?
- easton 1y agoLast week's Microsoft deal said Azure was still exclusive: https://openai.com/index/next-chapter-of-microsoft-openai-partnership/ https://openai.com/index/next-chapter-of-microsoft-openai-pa... But that feels weird combined with this. You can buy OpenAI API access which is served off of AWS infrastructure, but you can't bill for it through AWS? (I mean, lots of companies work like that. but Microsoft is betting that a lot of people move regular workloads to Azure so they can have centralized billing for inference and their other stuff?)
- f4uCL9dNSnQm 1y agoIt says > Non-API products may be served on any cloud provider. I am not sure if Bedrock counts. There are 2 OpenAI models already there: https://aws.amazon.com/blogs/aws/openai-open-weight-models-now-available-on-aws/ https://aws.amazon.com/blogs/aws/openai-open-weight-models-n...
- samcat116 1y agoI would imagine they couldn't offer models through Bedrock. I think this means training and traditional computing workloads for their products (such as the workspaces for Codex cloud)
- JCM9 1y agoDoes OpenAI have $38 billion to buy this? Does AWS have sufficient free cash flow to pay for this “infrastructure” investment they speak of? Recent analysis shows AWS is burning through Amazon’s free cash on AI buildouts which is very concerning if the bubble pops, leaving Amazon holding the bag of invested capital not making returns. Amazon is a bit late to the party on these headlines, and lots of unanswered questions about what’s really going on here.
- gizajob 1y agoNo, they don’t have the money at the bottom of their burning pit of other peoples cash.
- vessenes 1y agooAI is growing rapidly at over $1bn a month in revenues, maybe as much as $2bn if you read between the lines from Sam's interviews. Over 7 years will they see $38bn of revenue demand against inference? ABSOLUTELY. Is it an incredibly good trick to get access to that much infrastructure without having to run a datacenter while you pilot the fastest growth ever consumer tech company? I'd say it is. Others might disagree
- cmiles8 1y agoAmazon is a bit late to the announcements party on this front so this comes across as a bit “hey guys, us too!” Lots of questions on if this makes sense, and highly likely Amazon never gets $38B cash from OpenAI out of this.
- mocha_nate 1y agoi think this shows Amazon filling a need Microsoft couldn't. They probably tried, but decided to use Amazon cloud services after reviewing infrastructure needs.
- Handy-Man 1y agoMSFT is power constrained.[0] [0] https://www.tomshardware.com/tech-industry/artificial-intelligence/microsoft-ceo-says-the-company-doesnt-have-enough-electricity-to-install-all-the-ai-gpus-in-its-inventory-you-may-actually-have-a-bunch-of-chips-sitting-in-inventory-that-i-cant-plug-in https://www.tomshardware.com/tech-industry/artificial-intell...
- mike_d 1y agoEveryone is. The grids always had a problem supplying enough power to even modestly sized commercial datacenters. This is what kicked off the trend of companies building their own datacenters in obscure cities that used to house large steel mills or other power hungry businesses. I remember when everyone was racing to produce "datacenter in a shipping container" solutions. I just laughed because apparently nobody actually bothered to check if you could actually plug it in anywhere.
- bespokedevelopr 1y agoAmazon still does this. The customers aren’t saas companies in the bay though. It’s militaries, and they’re sent to FOBs.
- ahmeneeroe-v2 1y ago>"hey guys, us too!" In what context? This isn't fashion, being the 2nd mover has benefits which often outweigh the costs.
- Havoc 1y agoThey sure seem to be writing a lot of cheques. Hope they all cash ok because if they don’t it’ll suck the entire tech industry down with it
- gizajob 1y agoThose cheques absolutely are going to bounce at some point and will bring the entire tech industry down. At least on the stock market.
- jgbuddy 1y agoThis is crazy, satya punching the air rn
- Handy-Man 1y agoI don't think they care that much. They just aren't able to keep up with the infra that OpenAI wants. https://www.tomshardware.com/tech-industry/artificial-intelligence/microsoft-ceo-says-the-company-doesnt-have-enough-electricity-to-install-all-the-ai-gpus-in-its-inventory-you-may-actually-have-a-bunch-of-chips-sitting-in-inventory-that-i-cant-plug-in https://www.tomshardware.com/tech-industry/artificial-intell...
- ChrisArchitect 1y agoOfficial post: https://openai.com/index/aws-and-openai-partnership/ https://openai.com/index/aws-and-openai-partnership/ (https://news.ycombinator.com/item?id=45799021 https://news.ycombinator.com/item?id=45799021)
- datax2 1y agoLooks like someone knew about this on Thursday, gotta love those over efficient market trends.
- netdevphoenix 1y agoThis looks quite concerning imo. We all know this is a bubble. When the transformer implosion happens, you can be sure that OpenAI will be ground zero. All these investors feeding OpenAI and all these adjacent companies exposing themselves to OpenAI will suffer huge losses. Everyone is chasing growth so hard that they are making questionable choices regarding returns from a far future that may never come. And let's be clear, the future that is going to pay this off is a future where this tech or a direct successor to this tech brings about a level of general learning skills and autonomy that should be pretty close to a third revolution. Anything else is massive loves for all of these companies.
- lm28469 1y agoLike in politics, all they care about is getting out before shtf and pass the bag to the next sucker while making $$$ in the meantime
- empath75 1y agoYou are stating a lot of things as fact that aren't really supported. We don't know this is a bubble, we don't know that there will be a transformer implosion, whatever that means, we don't know that OpenAI would ground zero if this is a bubble and it pops, etc..
- indigodaddy 1y agoNo one ever knows before these things happen. These predictions are obviously always conjecture, they can’t be stated as fact, ever— at best you can give some supporting evidence often based on similar prior art
- indigodaddy 1y agoloves is typo for losses I assume?
- netdevphoenix 1y agoYes, sorry. I can't edit the post anymore
- weeeeelp 1y agohttps://archive.is/6DtPq https://archive.is/6DtPq
- JCM9 1y agoAt this point these announcements are more PR posturing than anything that makes financial sense for shareholders. I do worry what the other side of this looks like when the circular feedback loop driving hype up eventually reverses and drives things down with amplifying effect.
- justchad 1y agoCame to post something with a similar sentiment. It's going to have broad market effects when the circle dealing doesn't work out as intended. OpenAI is losing so much money every quarter that they will undoubtedly have to raise prices I would think and people may not be willing to pay them.
- whalesalad 1y ago> At this point these announcements are more PR posturing than anything that makes financial sense for shareholders. corporate would like you to find the difference between these two photos
- bwfan123 1y agoThe negative drumbeat has started, and the narrative is changing to become critical. Every new fad reaches a saturation point, and people's attention spans are short. Already, I see folks piling onto the quantum bandwagon as if LLMs are passe. Here, the clouds have pulled a trick to inflate their revenues with their own cashflows, and have not been punished yet for it by shareholders - except meta which is getting asked some difficult questions.
- hypeatei 1y agoWe all know this is going to pop at some point but I personally think Amazon would be a good investment for the next 6 months or so. They just did layoffs, can ride the OpenAI hypetrain, and they beat recent earnings. If they beat next earnings with a lower headcount and mention "AI" a couple times, I think their stock price easily goes to $300. Not financial advice, obviously, but that's my personal outlook. I've said it before: Alphabet is probably the safest play long term as they haven't been infected by any NVIDIA or OpenAI deals (yet)
- treis 1y agoOpenAI is an existential threat to Google. They're both solving the same problem for consumers. Something like "there's information on the Internet that I want but don't know where it is". Almost all of Google's value derives from being the default solution to that problem. They can't give up that space to OpenAI. And, at least IMHO, it's obvious LLMs are the future in this area. The other side to that coin is monetization. Google is dominant there as well. OpenAI can't yield that space to Google because it's how the value is extracted from the consumer.
- Marazan 1y agoAt this point it is getting beyond parody
- emptyfile 1y ago[dead]
- damnesian 1y agoGreat, can I buy hallucinated products now?
- JCM9 1y agoReading between the lines of Trainium left out of the announcement says they tried it, weren’t impressed, and wanted NVidia chips instead.
- Insanity 1y agoI don't think that's super surprising though. Nvidia has deals with OpenAI as well, so not using Trainium might have as much to do with OpenAI keeping Nvidia happy, as with Trainium not being on-par.
- JCM9 1y agoDidn’t stop OpenAI doing a mega deal with AMD. They just didn’t like the chips is the most logical answer. Particularly given AWS has been doing everything they can to pump up interest, and this huge PR release doesn’t even mention it at all. That omission speaks volumes.
- Insanity 1y agoAh that's true, I missed that AMD announcement.
- belval 1y agoMaybe but I wonder if it's just moving capacity around. Anthropic is moving to Trainium[1], that will free Nvidia GPUs and allow AWS to rent those GPUs to OpenAI. [1] https://finance.yahoo.com/news/amazon-says-anthropic-will-use-1-million-of-its-custom-ai-chips-141829311.html https://finance.yahoo.com/news/amazon-says-anthropic-will-us...
- brianbest101 1y ago[dead]
- Yizahi 1y agoOnly 38 billion dollars? I thought we are in the age of triple digit billion sums by now in the LLM space. What is that paltry change worth for, a couple seconds worth of OpenAI daily expenses?
- jcranmer 1y agoThe main question I have with all of these deals: how much of the deal is OpenAI actually required to buy, versus how much of it is an option for OpenAI to buy? Because if you tot up all of these numbers, it's something like 10× current annual revenue that OpenAI is signing deals for, and if OpenAI is actually committing to all of that spend... there is a serious cash crunch looming. But if OpenAI is merely optioning to spend up to that much, and only has to commit to a tenth of those numbers, well, that's not as threatening to OpenAI as a going concern.
- JCM9 1y agoThis does all smell a bit like when WeWork was buying up seemingly every available office for rent. When it came time to actually pay for said offices… oops.
- mike_d 1y ago> When it came time to actually pay for said offices… oops I was at WeWork around the time of its downfall. I have a lot of opinions about how that place was ran, but I can assure you pre-pandemic they were buying up every office space because they were filling them with tenants. Not paying for offices was a result of tenants not paying due to the pandemic.
- JCM9 1y agoAnd these GPUs aren’t sitting idle either. Nobody is questioning that they “need” the compute, it’s the lack of a viable business model to pay for all this long term that has folks worried. That’s the same as what happened when WeWork was buying up office space pre-pandemic and then using handwavy nonsense like “Community Adjusted EBITDA” as part of the smoke and mirrors to pretend like there was an actual business there. The pandemic expedited the pain, but the business model was broken and folks called BS long before Covid hit.
- treis 1y ago>it’s the lack of a viable business model to pay for all this long term that has folks worried. They're going to sell ads at the moment people are looking to buy stuff. It's the single most viable business model we've ever seen.
- mkhattab 1y agoThese deal numbers have lost all meaning for me. There’s been some buzz around the official opening of the Grand Egyptian Museum, which I visited last month. That project took 1.1 to 1.2B USD. Double its original budget estimate but still the museum looks fantastic and it feels, tangibly, like it’s worth a billion. In contrast with all the money spent on AI, it just feels like monopoly money. Where’s the monument to its success? We could’ve built flying cars or been back to the moon with this much money.
- Aperocky 1y agoI've been using AI and so did many people I knew. It's resulted in tangible difference in my life. It's much less likely that I'd drive a flying car and there is 0 chance that I would be the one going to the moon if we spent the equivalent money on those things instead.
- malux85 1y agoMe too, once you’ve had a lot of practice with it (like anything) and know how to mitigate some of its weaknesses, then it’s a superpower. I currently pay 200 USD a month for AI, and my company pays about 1,200 USD for all employees to use it essentially unlimited - and I get AT LEAST 5x the return on value on that, I would happy multiply all those numbers by 5 and still pay it. Domain knowledge, bug fixing, writing tests, fixing tests, spotting what’s incomplete, help visualising results, security review generation for human interpretation, writing boilerplate, and simpler refactors It can’t do all of these things end to end itself, but with the right prompting and guidance holy smokes does it multiply my positive traits as a developer
- pphysch 1y agoHow certain are you that you need to pay $200/mo/seat for this value?
- righthand 1y ago> I currently pay 200 USD a month for AI > and I get AT LEAST 5x the return on value on that You make $800 by paying OpenAI $200? Can you please explain how your the value put in is 5x and how I can start making $800 more a month? > holy smokes does it multiply my positive traits as a developer But it’s not you doing the work. And by your own admission, anyone can eventually figure it out. So if anything you’ve lost traits and handed them to the Llm. As an employee you’re less entrenched and more replaceable.
- throw_m239339 1y agoI wouldn't be surprised if a few weeks later, Amazon was investing $38B in NVIDIA for new server processors... like nothing to see here folks, totally not a giant circular bubble...
- Insanity 1y agoAnd so the bubble grows. I'd be happy if the industry/stock market proves me wrong, but I can't see this ending any other way than with a major crash that makes the dot-com boom seem like a minor blimp.
- PeaceTed 1y agoI really don't know with this. By that I mean all logic says that, yes this is absolutely a bubble. But the markets have been irrational for a very long time now, just look at Tesla stock and it wild valuations for years now as an example. This could go on for a lot longer than anyone would think reasonable.
- semiinfinitely 1y agoI can't see a prediction like this as anything other than a description of what would be maximally emotionally satisfying for you personally.
- Insanity 1y agoWhy? The numbers don’t make sense for the expected revenue.. they are significantly disconnected. And I have yet to see a “killer app” that can be monetized.
- Spivak 1y agoIt would be emotionally satisfying for the AI bubble to burst, bringing the rest of the industry down with it, and having a good chance of costing them their job? It doesn't come off as schadenfreude to me as much as it does the emotional clarity of accepting the oncoming train and knowing there's nothing you could have done to stop it. This brand of "just along for the ride" nihilism seems pretty damn common now.
- Libidinalecon 1y agoThat makes no sense. I started my career just past the peak of the dot com bubble and got absolutely crushed. It was probably the most demoralizing experience of my life. It was so damaging but no one is going to come out unscathed on the back side of all this.
- random9749832 1y agoWhat is the end goal? GPT-5 wasn't even a step up from o3. ChatGPT has 800 million weekly users but only 10 million are paying.
- vessenes 1y agoGPT 5 codex is definitely a step up from o3. I could use o3 still for chat, but prefer 5-thinking. Do you still use o3?
- JCM9 1y agoOpenAI is generating $13B a year in revenue. Let’s be generous and say $20B. They’ve signed commitments to spend something like $1.4 trillion on compute. An asset that to date has proven to have a hyper-depreciation cycle. Someone has to come up with $1.4 trillion in actual cash, fast, or this whole thing comes crashing down. Why? At the end of all this circular financing and deals are folks that actually want real cash (eg electricity utilities that aren’t going to accept OpenAI shares for payment). If the above doesn’t freak you about a bit at how bonkers this whole thing has become then you need a reality check. “Selling ads” on ChatGPT ain’t gonna close that hole.
- hluska 1y agoIs there a reason you’re posting so often on this thread? Everyone gets your point.
- JCM9 1y agoFair enough. I guess I’m just like those guys at the investors conference in The Big Short and can’t believe what I’m seeing.
- gretch 1y agoWhy does it matter if everyone else knows or cares? If you were actually the guys from the big short and you have strong conviction, you should short the market (literally like the guys from big short) and get really rich. Money is the language they understand, so hit them where it hurts.
- Uehreka 1y agoPeople always talk about shorting like it’s an efficient and reliable way to make money being right when everyone else is wrong. But it isn’t. When you go long, you can still make money by being “sort of right” or “obliquely right” or “somewhat wrong but lucky”or by just collecting dividends if the market stays irrational long enough. If you short something you have to be exactly right (both about what will happen and precisely when) or your money will end up in the hands of the people you’re betting against. It’s not a symmetrical thing you can just switch back and forth on.
- fathermarz 1y agoDoesn’t this mean that some percentage of Microsoft’s investment is being given directly to their competitor? This feels like a bubble moment.
- StarterPro 1y ago[flagged]
- markus_zhang 1y agoI don’t know but this feels more and more like jumping by stepping one’s own feet…
- system2 1y agoIf it is a bubble, why are huge companies like Amazon and Microsoft feeding it? What do they get by doing this nonstop? All I hear is that this is a bubble on the internet, yet big companies are making these huge deals. Don't they see what we, the uspeasants, see with their highly paid finance departments?
- pfortuny 1y agoIt is not a panic if you are the first out…
- jdlshore 1y agoBig companies are made out of people, and those people are just as fallible as everyone else… and more so, in fact. They’re prone to group-think and suppressing bad news. The existence proof is, well, every financial crisis ever. Start with the housing bubble and ask, why did huge banks whose entire job was financial modeling get caught up in it? What makes companies today immune to those same types of decision-making errors?
- tacker2000 1y agoTbh these juggernauts could survive an AI bubble bursting and pick up the pieces, they are playing with a little bit more than their spare change here.
- deleted 1y ago[deleted]
- chaosprint 1y agohttps://founderboat.com/interviews/2025-11-01-openai-sam-satya-microsoft/ https://founderboat.com/interviews/2025-11-01-openai-sam-sat... > A central theme of the discussion was the staggering demand for computational power. Gerstner highlighted OpenAI’s reported commitment of $1.4 trillion for compute over the next five years, questioning how a company with reported revenues of $13 billion could manage such an outlay. > Altman pushed back forcefully. “First of all, we’re doing well more revenue than that. Second of all, Brad, if you want to sell your shares, I’ll find you a buyer,” he quipped. He expressed profound confidence in the company’s trajectory. “We do plan for revenue to grow steeply. Revenue is growing steeply. We are taking a forward bet that it’s going to continue to grow.” This seems to be just the tip of the iceberg; what about the rest?
- dude250711 1y agoCould they not at least increase their profits by simply replacing expensive technical staff with AI?
- bfkwlfkjf 1y agoLOL Sam Conman trying to rope everybody in.
- TheAlchemist 1y ago"It's only when the tide goes out that you know who's been swimming naked." - Warren Buffett This bubble is one for the history books !
- nprateem 1y agoObviously the plan is to lock Anthropic and others out of AWS. All financial analysis misses the point. They just need to buy enough time and compute to out-last the competition. All bets are off if China find a way of reducing processing power by 50% or more. If only killing off grok and Gemini was so easy...
- deleted 1y ago[deleted]