OpenAI in talks with Amazon for over $10 bn investment ahead of potential IPO

OpenAI is in early-stage talks with investors to raise tens of billions of dollars at a valuation of around $750 billion, according to a media report.

The discussions are still preliminary, and key details, including the final valuation and participating investors, could change.

The potential fundraising comes as the ChatGPT parent expands its AI operations. Despite generating billions in revenue from enterprise services and licensing deals, the company is not yet profitable and continues to face high costs from computing, model training and infrastructure, which are expected to rise as AI systems grow more complex.

It has previously raised capital at increasing valuations, reflecting strong investor interest in generative AI. Media reports indicate that Amazon has considered a $10 billion investment in the past and is reportedly in talks again, potentially valuing the company at over $500 billion.

Microsoft remains OpenAI’s most prominent backer and commercial partner, with Amazon seeking to expand its own AI capabilities through AWS and investments in AI startups.

Amazon is in talks to invest in the company in a potential deal that could value the AI company at more than $500 billion, Reuters reported on Tuesday.

The retail shopping platform may invest around $10 billion.

Reuters reported in October that the company is considering an IPO that could value it at up to $1 trillion, although no timeline has been set. Such a listing would be one of the largest in tech history.

OpenAI CEO Sam Altman has previously said the company may need to invest trillions over time to support next-generation AI models and infrastructure. Analysts say the company’s ability to secure large-scale funding will be critical to maintain its technological lead and compete with rivals including Google, Meta and Amazon in a capital-intensive AI sector.

This year, firms including Nvidia and Oracle have signed multi-billion-dollar AI deals with OpenAI. In November, OpenAI also agreed to a $38 billion deal to purchase cloud services from Amazon.