Latest Breaking News

highplainsdem

(59,027 posts) Mon Nov 3, 2025, 09:52 AM Nov 3

OpenAI, Amazon strike $38 billion agreement for ChatGPT maker to use AWS

Source: Reuters

Amazon.com (AMZN.O) will supply OpenAI with cloud computing services under a multi-year $38 billion deal, giving the ChatGPT maker access to hundreds of thousands of Nvidia graphics processors to train and run its artificial intelligence models.

The agreement announced on Monday underscores the AI industry's insatiable appetite for computing power, driven by the pursuit of technology capable of matching or surpassing human intelligence. It sent Amazon shares up 5% in premarket trading.

-snip-

The deal is among the first major moves by OpenAI since it completed a restructuring last week that frees the ChatGPT maker to move away from its nonprofit roots. Reuters has reported it was laying the groundwork for an initial public offering that could value the company at up to $1 trillion.

But surging valuations of AI companies and their massive spending commitments, which total more than $1 trillion for OpenAI, have raised fears that the AI boom is inflating into a bubble.

-snip-

Read more: https://www.reuters.com/business/retail-consumer/openai-amazon-strike-38-billion-agreement-chatgpt-maker-use-aws-2025-11-03/

It is a bubble. And the AI bros don't care what they're destroying in their fantasies about superintelligent AI letting them rule the world.

Sam Altman is determined to have OpenAI considered "too big to fail" so it will get the trillions he wants even though what the company is best at is losing incredible amounts of money, year after year, to provide generative AI tools that they admit will never be reliable.

8 replies

= new reply since forum marked as read

Highlight:

OpenAI, Amazon strike $38 billion agreement for ChatGPT maker to use AWS (Original Post) highplainsdem Nov 3 OP

K&R n/t Hugin Nov 3 #1

Holy smokes! $38 BILLION?! That almost doubles AWS income over last year William Seger Nov 3 #2

They are inflating this bubble as fast as they can Miguelito Loveless Nov 3 #3

Amazon is my last resort and now I will no longer order from them kimbutgar Nov 3 #4

So you're also going to swear off anything that uses AWS as well? durablend Nov 4 #7

Good: AWS is so shit that it might actually destroy ChatGPT Prairie Gates Nov 3 #5

LOL. More of the "curcular financing" charade/fraud PSPS Nov 3 #6

Of course its income. This is equity financing. There's nothing bogus about it. mathematic Nov 4 #8

Hugin

(37,136 posts)

1. K&R n/t

Reply to highplainsdem (Original post)

Mon Nov 3, 2025, 10:34 AM

Nov 3

William Seger

(12,049 posts)

2. Holy smokes! $38 BILLION?! That almost doubles AWS income over last year

Reply to highplainsdem (Original post)

Mon Nov 3, 2025, 10:41 AM

Nov 3

... and doubles its carbon footprint.

Miguelito Loveless

(5,356 posts)

3. They are inflating this bubble as fast as they can

Reply to highplainsdem (Original post)

Mon Nov 3, 2025, 11:29 AM

Nov 3

Either way we lose. If the bubble pops, the economic collapse will rival, if not exceed, the Great Depression in scope. If AI succeeds, it will annihilate the working class and destroy the consumer economy.

Oh, and then it will kill us.

kimbutgar

(26,491 posts)

4. Amazon is my last resort and now I will no longer order from them

Reply to highplainsdem (Original post)

Mon Nov 3, 2025, 02:07 PM

Nov 3

After the orange turd was endorsed by Bezos i treated Amazon as a last resort. So by them letting off so many people which will ripple into a negative way in our economy he’ll have less consumers. I’m looking forward to the backlash l

durablend

(8,773 posts)

7. So you're also going to swear off anything that uses AWS as well?

Reply to kimbutgar (Reply #4)

Tue Nov 4, 2025, 09:05 AM

Nov 4

GOOD LUCK WITH THAT.

Prairie Gates

(6,828 posts)

5. Good: AWS is so shit that it might actually destroy ChatGPT

Reply to highplainsdem (Original post)

Mon Nov 3, 2025, 02:14 PM

Nov 3

Enshittification is accelerated in the enshittified world.

PSPS

(15,103 posts)

6. LOL. More of the "curcular financing" charade/fraud

Reply to highplainsdem (Original post)

Mon Nov 3, 2025, 11:41 PM

Nov 3

OpenAI books $38 billion from Amazon as income and then OpenAI "invests" $38 billion in AWS, which books the very same $38 billion as income. Stocks rise on the basis of this "new income" which isn't really income at all. This is happening almost every day in the AI charade.

mathematic

(1,598 posts)

8. Of course its income. This is equity financing. There's nothing bogus about it.

Reply to PSPS (Reply #6)

Tue Nov 4, 2025, 10:15 AM

Nov 4

Company sells equity -> buys product with proceeds
Result: equity holder is earns a portion of future profits & supplier books income

Company sells equity to supplier -> buys supplier product with proceeds
Result: supplier earns a portion of future profits & supplier books income

Why are so many people insisting there is something fraudulent about this, as if this is some kind of cascading cross default housing bubble scheme? Yes, if it turns out that AI isn't as profitable as expected these deals will turn out poorly. That's what equity investment is. It's an investment in future profits, which may be zero.

Tech firms invest hundreds of billions of dollars a year into new technology (companies that did not do this used to be the target of complaints: "companies line shareholder pockets instead of investing in the business" ) . That is what is happening. They are investing a lot into AI related technologies. That doesn't inherently make it a bubble and reasoning by analogy to lay retellings of past economic events is not actually an argument.

IMPORTANT EDIT:
After looking into the details of this deal, it doesn't even appear to be one of the many equity financing deals that other companies have announced. The extent of the details released is that this is just a straight up contract for services. This is literally traditional income. No equity stake involved. The income will be booked over the life of the multi-year deal as it comes in, like any contract.

Reply to this discussion