Amazon.com is discussing a potential investment in ChatGPT-developer OpenAI worth around $10 billion, according to multiple reports. The partnership could be bad news for chip makers Nvidia and Broadcom.
Nvidia shares fell 2% in morning trading; Broadcom down 1%; Amazon up 1%.
Amazon's investment would be tied to an agreement for OpenAI to use the e-commerce company's in-house Trainium chips, according to technology-focused news outlet The Information.
Amazon and OpenAI didn't immediately respond to requests for comment early Wednesday. Amazon shares were up 1.6% in premarket trading.
OpenAI and Amazon are already partners, with the two companies reaching a $38 billion agreement for Amazon Web Services to provide infrastructure for AI workloads in November. However, that deal was based on the use of Nvidia chips rather than Amazon's own Trainium processors.
Trainium chips have been an important project at Amazon as it seeks to make sure it doesn't become too dependent on costly hardware from Nvidia. Amazon said earlier this month that "UltraServers" powered by up to 144 of its in-house Trainium 3 chips are now available, offering more than four times the computing performance than the previous generation.
However, there have been questions about how many external customers are prepared to use the Trainium hardware. Getting OpenAI -- one of the biggest spenders in the AI hardware sector -- on board would be a coup for Amazon, even at the cost of a $10 billion investment, which is set to value OpenAI at more than $500 billion, according to reports.
Such a deal would arguably reduce the scope for OpenAI's spending on chips from Nvidia, as well as the Tensor Processing Units jointly developed by Broadcom and Google.
However, more purchases of Trainium hardware could be good news for custom-chip designer Marvell Technology, which has worked on previous generations of the processors.
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