Amazon in talks to invest $10 billion or more in OpenAI

Mackenzie Sigalos (Business News) 00:00.350

hey kelly so this is a win win for both amazon and open AI now for amazon it is about redemption anthropic

Mackenzie Sigalos (Business News) 00:07.070

had been its marquee AI partner running its cloud models on amazon 's in-house AI chips but lately the startup has been signing new compute deals with microsoft and google and that's been a reputational hit for amazon and especially for its trainium chips which still are viewed

Mackenzie Sigalos (Business News) 00:22.630

which are still not viewed as best in class on performance now as for what open AI gets out of this it's all about cost the company is at a one point four trillion dollar compute bill over the next several years and a lot of that was modeled on nvidia pricing

Mackenzie Sigalos (Business News) 00:36.710

but amazons trainium chips can undercut blackwells on cost by up to forty percent and that is real money so if this comes together it's chips for equity amazon gets a flagship customer and a bigger seat in the AI race well open AI diversifies suppliers and brings down its run

Mackenzie Sigalos (Business News) 00:53.790

rate and you can see that narrative playing out in the stock amazon has been the mag seven laggard this year but shares are higher today and leading that group so far this session off the back of that open AI deal talk and just an hour ago tuck kelly CEO andy jassy announcing a

Mackenzie Sigalos (Business News) 01:08.590

major shake up for its AI team rohit prasad who ran amazons AI efforts is departing an aws infrastructure head peter desantis is stepping in he'll oversee a new team that groups its AGI chips and quantum teams all under one roof kelly i'm

Kelly Evans (Anchor) 01:23.830

asking chatgpt how good are amazon 's AI chips because that's the part of the story mackenzie that i get stuck on like i go OK amazon which has big anthropic investment now it's investing in open AI OK fine maybe doesn't feel great if you're anthropic but it's it's the fact that

Kelly Evans (Anchor) 01:38.390

they're going to use amazon 's chips i don't feel like i hear a lot about those

Mackenzie Sigalos (Business News) 01:42.950

and out here in the valley they don't have the best reputation on performance what they do you know have a name for is being the competitive being competitive on pricing that's something that andy jassy has really pushed during earnings calls talking about the fact that they

Mackenzie Sigalos (Business News) 01:56.590

undercut nvidia there but it's really google 's tpu 's their in-house you know their in-house AI chips that have been the popular choice here and up to this point open AI has exclusively worked with nvidia 's GPU 's whether they're using google cloud or they have their with

Mackenzie Sigalos (Business News) 02:13.190

microsoft and amazon so this will be a real pressure test of the trainium chips to see how they do with running and training open AI models and it comes at a time that open AI really needs to save on cost because when you look at these build outs that they've committed to every

Mackenzie Sigalos (Business News) 02:28.030

gigawatt of compute costs roughly fifty billion dollars and according to nvidia pricing roughly thirty five billion dollars of that is on chips as if they can save on cost there that ripples across

Kelly Evans (Anchor) 02:38.510

everything according to chatgpt they say amazon 's AI chips are good especially if you're all in on aws and care about costs but they're not a universal drop in replacement for nvidia GPU so there we have it thirty three seconds by the way to give me that answer mackenzie thanks

Kelly Evans (Anchor) 02:51.870

for now we appreciate it