OpenAI, the developer of AI model ChatGPT, has completed a $110 billion funding round, with its corporate valuation assessed at $730 billion.
On the 27th (local time), OpenAI announced it secured the largest investment in company history, including $50 billion from Amazon. SoftBank and Nvidia each invested $30 billion. A $50 billion investment is unprecedented since Amazon's founding. Amazon plans to invest $15 billion initially and add $35 billion within months once certain conditions are met.
OpenAI signed a strategic partnership with Amazon and secured next-generation inference computing from Nvidia. Through the partnership, OpenAI will use Amazon's proprietary AI chip Trainium via Amazon AWS data center infrastructure. The companies also agreed to jointly develop customized AI models for Amazon developers to use in Amazon applications.
Amid concerns over investment overheating between AI startups and Big Tech, this investment is interpreted as an example of the industry's open "circular dealing." When Big Tech invests in AI startups, the startups use that money to pay Big Tech again, completing the AI infrastructure supply chain.
Amazon's participation in this funding round is expected to strengthen cooperation with OpenAI. This also dispelled concerns that infrastructure expansion investments were unrealistic. OpenAI previously announced plans to invest more than $1.4 trillion in AI infrastructure.
Microsoft, OpenAI's largest investor, stated that its relationship with OpenAI remains solid regardless of competitors like Amazon joining as investors. In a joint statement, OpenAI and Microsoft said, "Nothing announced today changes the terms of Microsoft and OpenAI's relationship." Notably, both Amazon and Microsoft have also invested in OpenAI competitor Anthropic.
However, with OpenAI's valuation rising approximately 1.5 times in four months, markets wary of an AI bubble showed volatility. On the New York Stock Exchange, the S&P 500 index opened at 6,856.54, down 52.3 points (0.76%) from the previous session, while the Nasdaq Composite opened at 22,615.429, down 263.0 points (1.15%).
Bloomberg reported, "The stock decline puts the S&P 500 on track for its largest monthly drop since March last year," adding that "OpenAI's success in securing $110 billion in funding has reignited concerns about an AI bubble."