What Amazon and Microsoft Will Win or Lose From OpenAI’s New Deals
TL;DR
OpenAI’s wide-ranging partnership with Amazon, announced on Friday as part of a bigger series of funding agreements valuing the company at $730 billion before the investment, means the ChatGPT creator will soon have two of the three biggest cloud firms pitching its services. But can both Amazon and Microsoft get a big boost without encroaching on each other’s territory? Then there’s the impact on Nvidia, which is putting in $30 billion as part of an expanded chip deal. OpenAI is discussing raising additional funding in this round from financial investors such as United Arab Emirates investment fund MGX and others. That portion of the round is expected to total at least $10 billion and is expected to close by the end of March, a person with knowledge of the discussions said.
Nauti's Take
Two competing cloud giants selling the same AI product sounds like distribution strategy — it's actually a control problem. OpenAI sits at the top letting Amazon and Microsoft fight over margins, while Nvidia drops $30B to make sure the chip bill always lands with them.
Summary
OpenAI’s wide-ranging partnership with Amazon, announced on Friday as part of a bigger series of funding agreements valuing the company at $730 billion before the investment, means the ChatGPT creator will soon have two of the three biggest cloud firms pitching its services. But can both Amazon and Microsoft get a big boost without encroaching on each other’s territory?
Then there’s the impact on Nvidia, which is putting in $30 billion as part of an expanded chip deal. OpenAI is discussing raising additional funding in this round from financial investors such as United Arab Emirates investment fund MGX and others.
That portion of the round is expected to total at least $10 billion and is expected to close by the end of March, a person with knowledge of the discussions said.
Sources