OpenAI Pursues Amazon Investment While Microsoft Partnership Evolves

OpenAI is reportedly in advanced discussions with Amazon for a significant investment exceeding $10 billion. This potential deal, which could value OpenAI at over $500 billion, would involve OpenAI utilizing Amazon's custom AI chips, such as the latest Trainium generation, and leveraging Amazon's extensive cloud infrastructure through AWS. This move follows OpenAI's recent shift in October, granting it more operational flexibility beyond its existing partnership with Microsoft, which has invested over $13 billion since 2019. OpenAI has made substantial infrastructure commitments, including a $38 billion AWS capacity deal, highlighting the immense demand for AI computing resources. Amazon's interest in OpenAI is part of its broader strategy in the AI sector, as the company previously committed $8 billion to Anthropic, another prominent AI developer. News of the potential OpenAI investment caused Amazon's stock price to rise, reflecting investor optimism. Amazon Web Services (AWS) continues to be a major growth driver, with AI services showing triple-digit revenue growth and a growing backlog of $200 billion. Meanwhile, Google Cloud also demonstrates robust growth, with its revenue jumping 34% to $15.2 billion in the third quarter and an operating income surge of 85% to $3.6 billion. Google plans significant capital expenditures of $91 billion to $93 billion for 2025 to support its expanding AI infrastructure. In other AI developments, Nvidia's stock is down about 17% from its October peak, and a major comeback by year-end appears unlikely, despite strong Q3 results of $57 billion in revenue. Nvidia faces increasing competition from Alphabet's TPUs and AMD's chips. Tata Consultancy Services (TCS) aims to become a top AI services company, reporting $1.5 billion in annualized AI-related revenue and completing over 5,500 AI projects. London-based startup Ankar secured $20 million in Series A funding to streamline patent filings using AI. However, some AI stocks like Palantir and BigBear.ai face challenges, with Palantir's high valuation and BigBear.ai's declining revenue and loss of a key U.S. Department of Defense contract to Alphabet's Gemini model.

Key Takeaways

• OpenAI is in advanced talks with Amazon for an investment exceeding $10 billion, potentially valuing OpenAI at over $500 billion.
• The deal would include OpenAI using Amazon's custom AI chips, like Trainium, and leveraging Amazon Web Services (AWS) cloud infrastructure.
• OpenAI has made over $1.4 trillion in infrastructure commitments, including a $38 billion AWS capacity deal.
• Microsoft has invested over $13 billion in OpenAI since 2019, but OpenAI gained more flexibility in October.
• Amazon previously committed $8 billion to Anthropic, another AI competitor.
• Google Cloud's Q3 revenue jumped 34% to $15.2 billion, with operating income surging 85% to $3.6 billion.
• Alphabet plans $91 billion to $93 billion in capital expenditures for 2025 to support AI infrastructure.
• Nvidia's stock is down about 17% from its October peak, despite Q3 revenue of $57 billion, facing competition from Alphabet's TPUs and AMD.
• Tata Consultancy Services (TCS) achieved $1.5 billion in annualized AI-related revenue and completed over 5,500 AI projects.
• BigBear.ai's Q3 revenue declined 20%, and it lost the U.S. DoD's GenAI.mil contract to Alphabet's Gemini model.

Amazon may invest $10 billion in OpenAI for AI chips

OpenAI is talking with Amazon about a big investment of $10 billion or more. This deal could value OpenAI at over $500 billion. Amazon would also use OpenAI's advanced AI models, and OpenAI would benefit from Amazon's vast cloud infrastructure. This investment helps OpenAI afford server commitments to Microsoft and compete better in the AI market. The discussions are ongoing and terms could change.

OpenAI and Amazon discuss over $10 billion investment

OpenAI is discussing a potential investment of $10 billion or more with Amazon. This agreement would also include OpenAI using Amazon's AI chips. Microsoft has invested over $13 billion in OpenAI since 2019, but OpenAI now has more flexibility. OpenAI has made huge infrastructure commitments, including deals with Nvidia and Oracle. In October, OpenAI finalized a $6.6 billion share sale, valuing the company at $500 billion.

Amazon may invest $10 billion in OpenAI for AI chips

OpenAI is talking with Amazon about a possible investment exceeding $10 billion. This deal would also involve OpenAI using Amazon's custom AI chips like the latest Trainium generation. OpenAI recently committed over $1.4 trillion to infrastructure, including a $38 billion AWS capacity deal last month. This follows an October change that gives OpenAI more freedom beyond its Microsoft partnership. Amazon has also committed $8 billion to Anthropic, showing its strong interest in the AI sector.

Amazon stock rises on OpenAI funding talks

OpenAI is reportedly in talks to raise $8 billion to $10 billion, with Amazon among the potential investors. This news caused Amazon's stock price to rise. Microsoft, a long-time partner, is also expected to participate in the funding round. This partnership could mean Amazon provides cloud computing resources through AWS and gains access to OpenAI's cutting-edge AI technologies. The talks highlight the immense demand for AI infrastructure and advanced AI chips.

Google Cloud shows strong growth in AI infrastructure

Google Cloud is becoming a major profit driver for Alphabet, showing strong growth in its third quarter results. Google Cloud's revenue jumped 34% to $15.2 billion, and its operating income surged 85% to $3.6 billion. The company's cloud backlog also increased by 46% to $155 billion, reflecting long-term commitments for AI workloads. Alphabet plans huge capital expenditures of $91 billion to $93 billion for 2025 to support this AI infrastructure. Google Cloud is also powering AI features in products like Google Search and YouTube.

Amazon shows strong AI growth across its businesses

Amazon is ending 2025 with strong momentum across its three main businesses: online retail, advertising, and cloud computing. Its online retail and Prime subscription services continue to grow steadily. The advertising business is accelerating, reaching a $70 billion annual run rate, partly due to Prime Video. Amazon Web Services, the company's most important segment, grew 20% year-over-year, with AI services showing triple-digit revenue growth. AWS has a growing backlog of $200 billion, with new deals signed in October.

OpenAI discusses over $10 billion AI investment with Amazon

OpenAI is in advanced talks with Amazon for a major investment of over $10 billion. This deal would include OpenAI using Amazon's advanced AI chips like Trainium. OpenAI has made huge infrastructure commitments, including a recent Amazon Web Services capacity deal. Amazon has also committed $8 billion to Anthropic, a competitor to OpenAI. The deal could finalize by early 2026, boosting OpenAI's AI development and Amazon Web Services' revenue.

Consider selling Palantir and BigBear.ai AI stocks

Investors should consider selling Palantir and BigBear.ai stocks before 2026 due to high expectations and poor performance. Palantir's stock is very expensive, trading at 259 times forward earnings, despite its strong Q3 revenue growth of 63%. Analysts expect its revenue growth to slow to 41% in 2026, which could disappoint investors. BigBear.ai faces bigger problems, with its Q3 revenue declining by 20% for the second quarter in a row. The company also lost a key contract for the U.S. Department of Defense's GenAI.mil tool to Alphabet's Gemini model.

iShares AI Tech ETF doubles but shows high risk

The iShares Future AI and Tech ETF has seen significant growth, nearly doubling in price since April. This ETF, launched in 2018, holds 48 stocks related to AI technology. However, the AI industry is very volatile, and this ETF experienced a nearly 56% drop between February 2021 and October 2022. While it offers a way to invest in AI without picking individual stocks, investors should be ready for big price swings. Other tech ETFs like Invesco QQQ and Vanguard Information Technology ETF offer more diversification and less short-term volatility.

AI spending worries and Trump impact industrial defense stocks

Concerns about overspending on AI infrastructure are causing Nasdaq-listed companies and industrial stocks to fall. Talks about Oracle's data centers stalled, raising fears of project delays and canceled orders for companies like Eaton and GE Vernova. Meanwhile, defense stocks such as Lockheed Martin and L3Harris also dropped. This happened after reports that the Trump Administration wants to limit contractor dividends and buybacks if projects go over budget. Boeing, which has faced defense project challenges, is not affected as it has not returned cash to shareholders recently.

TCS aims for top AI services spot with $1.5 billion revenue

Tata Consultancy Services Ltd. (TCS) aims to become the world's largest AI-led technology services company. CEO K Krithivasan announced that the company has achieved $1.5 billion in annualised AI-related revenue. TCS has completed over 5,500 AI projects and 209 platform deployments. The company is adopting an 'AI First' culture and a full-stack approach, covering everything from chip design to AI agents. TCS has also trained 100% of its customer-facing teams and over 180,000 associates in AI competencies.

Ankar AI startup raises $20 million for patent filings

Ankar, a London-based startup, secured $20 million in Series A funding to use AI for streamlining patent filings. Former Palantir employees Tamar Gomez and Wiem Gharbi founded Ankar in 2024. The company aims to make the patent process faster and easier, which can currently take up to 24 months. Ankar's AI tools can search 150 million patent applications and 250 million scientific papers. This helps inventors and lawyers assess new inventions and draft patent applications more efficiently.

Nvidia stock comeback unlikely by year end

Nvidia's stock is down about 17% from its October peak, and a major comeback by year-end seems unlikely. While Nvidia has seen December surges before, the market's growth has slowed recently. The company would need to rise 17.4% to reach its October record of $207.04. Nvidia recently reported strong Q3 results with $57 billion in revenue, up 62%, and a 73.4% gross margin. However, it is hard to imagine news big enough to add $700 billion to its market value so quickly, especially with competition from Alphabet's TPUs and AMD's chips.

Sources

• OpenAI in Talks to Raise At Least $10 Billion From Amazon and Use Its AI Chips
• OpenAI in talks with Amazon about investment that could exceed $10 billion
• Amazon Reportedly in Talks to Inject $10B+ into OpenAI, With Deal Tied to Its AI Chips
• Amazon Stock Is Rising on OpenAI Funding Talks. What It Means for AI Chips
• AI Infrastructure: 1 Cloud Stock Poised for Explosive Growth
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• AI spending worries hit industrials, Trump takes aim at defense stocks
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