AI Daily: AWS, OpenAI announce $38B strategic partnership

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

AWS, OPENAI PARTNERSHIP: Amazon Web Services (AMZN) and OpenAI announced a multi-year, strategic partnership that provides AWS’s infrastructure to run and scale OpenAI’s core artificial intelligence workloads starting immediately. “Under this new $38 billion agreement, which will have continued growth over the next seven years, OpenAI is accessing AWS compute comprising hundreds of thousands of state-of-the-art NVIDIA GPUs, with the ability to expand to tens of millions of CPUs to rapidly scale agentic workloads. AWS has unusual experience running large-scale AI infrastructure securely, reliably, and at scale-with clusters topping 500K chips. AWS’s leadership in cloud infrastructure combined with OpenAI’s pioneering advancements in generative AI will help millions of users continue to get value from ChatGPT… The infrastructure deployment that AWS is building for OpenAI features a sophisticated architectural design optimized for maximum AI processing efficiency and performance. Clustering the NVIDIA GPUs-both GB200s and GB300s-via Amazon EC2 UltraServers on the same network enables low-latency performance across interconnected systems, allowing OpenAI to efficiently run workloads with optimal performance. The clusters are designed to support various workloads, from serving inference for ChatGPT to training next generation models, with the flexibility to adapt to OpenAI’s evolving needs,” OpenAI stated.

After Amazon Web Services and OpenAI announced a multi-year strategic partnership under which OpenAI will run and scale its core AI workloads on AWS infrastructure, Evercore ISI analyst Mark Mahaney reiterates an Outperform rating and $335 price target on shares of the analyst’s number one “Large Cap ‘Net Long” stock. AWS will supply Amazon EC2 UltraServers built around hundreds of thousands of Nvidia (NVDA) GPUs, with the ability to scale to tens of millions of CPUs, notes the analyst. The agreement represents a $38B commitment over seven years, with most capacity targeted to be in place by the end of 2026 and room to expand into 2027 and beyond, adds the firm, which sees “material upside” for Amazon.

AI CLOUD CONTRACT: Iren (IREN) announced it has signed a multi-year GPU cloud services contract with Microsoft (MSFT). Under the agreement, IREN will provide Microsoft with access to Nvidia GB300 GPUs over a five-year term, with a total contract value of approximately $9.7b, including a 20% prepayment. IREN has also entered into an agreement with Dell Technologies (DELL) to purchase the GPUs and ancillary equipment for approximately $5.8B. The GPUs are expected to be deployed in phases through 2026 at IREN’s 750MW Childress, Texas campus, in conjunction with the delivery of new liquid-cooled data centers that will collectively support 200MW of critical IT load. IREN expects to fund the capital expenditures associated with the contract through a combination of existing cash, customer prepayments, operating cashflows and additional financing initiatives.

BLACKWELL CHIP: U.S. President Donald Trump said Nvidia’s Blackwell chip for AI would not be available for “other people,” Alexandra Alper of Reuters reports. Many have wondered if Trump would allow shipments of a version of Blackwell to China after he suggested he might allow a scaled-down version in China, but recent remarks suggest his administration is not inclined to grant broad overseas access to the chip. “The new Blackwell that just came out, it’s 10 years ahead of every other chip,” Trump told reporters. “But no, we don’t give that chip to other people,” he added, according to Reuters.

FIBER DEAL: Verizon Business (VZ) announced a new Verizon AI Connect deal with Amazon Web Services to provide the resilient high-capacity, low-latency network infrastructure essential for the next wave of artificial intelligence innovation. As part of the deal, Verizon will build new, long-haul, high-capacity fiber pathways to connect AWS data center locations. This will enable AWS to continue to deliver and scale its secure, reliable, and high-performance cloud services for customers building and deploying advanced AI applications at scale. These new fiber segments mark a significant commitment in Verizon’s network buildout, to enable the AI ecosystem to intelligently deliver the exponential data growth driven by generative AI. The Verizon AI Connect solution will provide AWS with resilient network paths that will enhance the performance and reliability of AI workloads underpinned by Verizon’s award-winning network.

AI STUDIO: Google (GOOGL; GOOG) said in a post on X: “Gemma is available via an API and was also available via AI Studio, which is a developer tool (in fact to use it you need to attest you’re a developer). We’ve now seen reports of non-developers trying to use Gemma in AI Studio and ask it factual questions. We never intended this to be a consumer tool or model, or to be used this way. To prevent this confusion, access to Gemma is no longer available on AI Studio. It is still available to developers through the API.”