OpenAI in $10B+ Talks with Amazon to Challenge Nvidia’s AI Chip Dominance

OpenAI is negotiating a landmark deal with Amazon that could exceed $10 billion, signaling a strategic shift in the AI infrastructure race. Discussions began in October 2023, coinciding with Microsoft's finalized 27% stake in OpenAI - a development that freed the AI pioneer to explore alternative partnerships.

Amazon is aggressively pushing its Trainium chips as a cost-efficient alternative to Nvidia's GPUs for large language model training. The e-commerce giant claims its proprietary silicon delivers better price-performance ratios, with Meta and other developers already testing competing solutions from Google and AWS.

The potential alliance WOULD mark a watershed for Amazon's semiconductor ambitions. While AWS dominates cloud infrastructure, it trails in AI developer mindshare - a gap exacerbated by Microsoft's tight integration with OpenAI. Securing OpenAI as both an investor and Trainium customer could finally give Amazon credible traction in the model training arena.

OpenAI's valuation recently touched $500 billion in a secondary share sale, briefly eclipsing SpaceX. Such stratospheric growth has raised eyebrows on Wall Street, even as tech giants vie for position in the $1 trillion AI hardware market.