Amazon plans to invest in OpenAI after laying off 16,000 employees
After laying off 16,000 employees, Amazon is in talks to invest up to $50 billion in OpenAI, showing how aggressively it is betting on artificial intelligence.
Just days after announcing its biggest job cuts in years, Amazon is quietly working on a deal that could change its future. The company is in talks to invest up to $50 billion in OpenAI, the artificial intelligence firm behind ChatGPT, according to people familiar with the matter.
This discussion is taking place at a time when Amazon is cutting costs on the one hand and opening its wallet on the other. On Wednesday, the company confirmed it would let go of about 16,000 corporate employees, following another round of about 14,000 layoffs in October. While thousands of roles are being cut, Amazon is doubling down on AI, a technology it sees as central to what’s next.
After laying off 16,000 employees, Amazon reportedly plans to invest in OpenAI
People familiar with the talks say Amazon CEO Andy Jassy is personally leading talks with OpenAI CEO Sam Altman. The final structure of the investment has not yet been decided, and details may still change. But if the deal goes through at a higher level, Amazon would become the largest contributor to OpenAI’s latest fundraising effort.
The Wall Street Journal reported that OpenAI is currently seeking to raise up to $100 billion in new capital, a round that could value the company at up to $830 billion. The company is also talking to other deep-pocketed investors. SoftBank is in discussions to invest up to $30 billion, while Middle Eastern sovereign wealth funds and global venture capital firms are also part of the talks. OpenAI’s existing backers already include Thrive Capital, Khosla Ventures and MGX, a UAE-based fund.
A potential investment would add another layer to the growing relationship between Amazon and OpenAI. Although OpenAI has long been dependent on Microsoft for computing power, it signed a major deal with Amazon Web Services in November, agreeing to buy $38 billion worth of cloud services over several years. The direct investment will take the partnership beyond infrastructure and into long-term alignment.
At the same time, Amazon has not placed all its AI bets in one place. The company has also invested money in Anthropic, one of OpenAI’s main rivals. By the end of 2024, Amazon had invested about $8 billion in startups and is counted as a major cloud customer. It also built an $11 billion data center campus in Indiana to support Anthropic’s computing needs.
Inside Amazon, AI is increasingly being used across teams, in both customer-facing products and internal systems. Even as the company is cutting jobs, spending on AI infrastructure continues to increase, indicating where leadership believes the long-term value lies.
OpenAI, founded in 2015, has grown at a remarkable pace, largely due to the global popularity of ChatGPT. Running and training advanced AI models comes with huge costs, ranging from computing power to retaining top researchers in a highly competitive recruiting market. To support its growth, OpenAI recently announced plans to introduce advertising, which will open up a new revenue stream beyond subscriptions.