OpenAI has agreed a seven-year, $38 billion partnership with Amazon Web Services to run and scale its artificial intelligence workloads, marking a significant shift in the start-up’s cloud strategy following a recent restructuring.

Under the agreement, OpenAI will gain immediate access to AWS infrastructure, including hundreds of thousands of Nvidia graphics processors clustered via Amazon EC2 UltraServers, with capacity targeted to be fully deployed by the end of 2026 and room to expand in 2027 and beyond, according to Amazon and Reuters.

AWS described the architecture as designed for low-latency performance across interconnected systems, supporting both inference for ChatGPT and training of next-generation models.

“Scaling frontier AI requires massive, reliable compute,” said OpenAI co-founder and chief executive officer Sam Altman. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”

Matt Garman, the chief executive of AWS, added that OpenAI’s ambitions would be supported by “best-in-class infrastructure,” adding that the breadth and availability of optimised compute show why AWS is positioned to serve OpenAI’s workloads.

The deal arrives as OpenAI pursues what Altman has called a commitment to spend about $1.4 trillion on computing resources and develop 30 gigawatts of capacity, with recent contracts also involving Oracle, Broadcom, AMD, Nvidia, Google and Samsung, according to the Financial Times and the Guardian. OpenAI has said these agreements are structured as incremental payments as new power comes online.

Microsoft last week disclosed that OpenAI’s losses were roughly $12 billion in the past quarter, while OpenAI has signalled annualised revenue of about $13 billion, with Altman telling investor Brad Gerstner that the company makes “well more” than reported and that he is confident revenue will continue to grow.

OpenAI’s restructure converted its main business into a for-profit corporation, valued at around $500 billion, and removed Microsoft’s first right of refusal on new cloud contracts, clearing the path for the AWS deal, according to the Guardian and the Financial Times. Reuters reported that OpenAI also agreed to purchase $250 billion of Microsoft’s Azure cloud services as part of the new arrangement, while diversifying its suppliers to reduce mutual dependence.

Following Monday’s announcement, Amazon’s shares reached an all-time high, adding about $140 billion to its market value, Reuters reported. Analysts have questioned the sustainability and financing of industry-wide data centre spending, with Morgan Stanley estimating global outlays near $3 trillion by 2028, the Guardian noted.

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