OpenAI has secured a $38 billion (£29 billion) agreement to leverage Amazon’s infrastructure for its artificial intelligence offerings, part of a broader initiative exceeding $1 trillion in investments in computing resources.

This partnership with Amazon Web Services provides OpenAI with immediate access to AWS data centers and the Nvidia chips utilized within them.

Last week, OpenAI CEO Sam Altman stated that the company is committed to an investment of $1.4 trillion in AI infrastructure, highlighting concerns over the sustainability of the expanding data center ecosystem, which serves as the backbone of AI applications such as ChatGPT.

“To scale frontier AI, we need large-scale, dependable computing,” Altman remarked on Monday. “Our collaboration with AWS enhances the computing ecosystem that fuels this new era and makes sophisticated AI accessible to all.”

OpenAI indicated that this deal will provide access to hundreds of thousands of Nvidia graphics processors for training and deploying its AI models. Amazon plans to incorporate these chips into its data centers to enhance ChatGPT’s performance and develop OpenAI’s upcoming models.

AWS CEO Matt Garman reaffirmed that OpenAI is continuously pushing technological boundaries, with Amazon’s infrastructure forming the foundation of these ambitions.

OpenAI aims to develop 30 gigawatts of computing capacity, enough to supply power to approximately 25 million homes in the U.S.

Recently, OpenAI declared its transformation into a for-profit entity as part of a restructuring effort that values the startup at $500 billion. Microsoft, a long-time supporter, will hold roughly 27% of the new commercial organization.

The race for computing resources among AI firms has sparked worries among market analysts regarding financing methods. The Financial Times reported that OpenAI’s annual revenue is approximately $13 billion, a figure starkly contrasted by its $1.4 trillion infrastructure expenditures. Other data center deals OpenAI has entered include a massive $300 billion agreement with Oracle.

During a podcast with Microsoft CEO Satya Nadella, Altman addressed concerns regarding spending, stating “enough is enough” when prompted by host Brad Gerstner about the disparity between OpenAI’s revenue and its infrastructure costs.

Altman claimed that OpenAI generates revenue “well above” the reported $13 billion but did not disclose specific figures. He added: “Enough is enough…I believe there are many who wish to invest in OpenAI shares.”

Analysts at Morgan Stanley have forecast that global data center investment will approach $3 trillion from now until 2028, with half of this spending expected to come from major U.S. tech firms, while the remainder will be sourced from private credit and other avenues. The private credit market is an expanding segment of the shadow banking industry, raising concerns for regulators such as the Bank of England.