Tech giant Amazon (AMZN) is reportedly in talks to invest up to $50 billion in OpenAI, according to the Wall Street Journal. The discussions are said to be happening directly between OpenAI CEO Sam Altman and Amazon CEO Andy Jassy. While the exact details are still being worked out, a term sheet could be signed in the coming weeks.
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If the deal moves forward, it would be notable because Amazon has already invested in one of OpenAI’s biggest competitors, Anthropic. However, these talks are not entirely new. Indeed, Amazon and OpenAI have been discussing a possible investment since last year. Earlier reports also suggested that part of the agreement could involve OpenAI using Amazon’s own AI chips.
Interestingly, today’s news comes after The Information reported on Wednesday that Nvidia (NVDA), Amazon, and Microsoft (MSFT) are in discussions to invest as much as $60 billion in OpenAI. According to the report, Nvidia, which already backs OpenAI and supplies the chips used to run its AI models, is considering an investment of up to $30 billion on its own. OpenAI is also said to be holding fundraising talks with several other potential investors, and the total funding round could reach roughly $100 billion.
Is Amazon a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 46 Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMZN price target of $295.30 per share implies 22.2% upside potential.
