The circular trade keeps circling

Hot on the heels of a flurry of deals with big shots like Nvidia, Google, and Oracle, OpenAI announced today that it inked yet another one: a $38 billion partnership with Amazon.

Under the seven-year agreement, OpenAI will immediately start using Amazon Web Services’s infrastructure to run its software. And as if this AI marriage wasn’t bringing in enough big names already, Nvidia is also involved, of course: As part of the deal, OpenAI can access hundreds of thousands of Nvidia GPUs that are currently used by AWS data centers. While the deal will start with OpenAI using the data centers Amazon already has, Amazon will eventually begin to build new ones just for OpenAI.

The agreement is a blow to Microsoft, which was OpenAI’s only cloud provider until earlier this year, while it’s yet another sign that OpenAI’s hunger for computing power still hasn’t been satisfied.

“Scaling frontier AI requires massive, reliable compute,” explained OpenAI CEO Sam Altman in a statement.

Shares of Amazon jumped 4% on the news, while Nvidia gained 2.17%.

Big tech is making big deals

OpenAI’s latest deal helped buoy the entire market today, but it’s far from the only big AI news shaking up the industry.

Microsoft announced today that it’s going to spend over $15 billion on data centers and other AI infrastructure in the United Arab Emirates. As part of the deal, the US approved plans for Microsoft to send Nvidia chips to the UAE to build data centers.

That wasn’t all Microsoft has been up to. The company also signed a $9.7 billion deal with data center operator IREN to expand Microsoft’s computing capacity without the company having to actually build new data centers—sending shares of IREN, which was previously a bitcoin mining company but pivoted to AI—up 11.52% today.

And while all these AI deals make you worried about a bubble, Nvidia analysts aren’t sweating it. Loop Capital Markets raised its price target for Nvidia to $350, roughly 70% higher than where shares trade today. Analysts noted that even after reaching a $5 trillion market cap, demand for Blackwell chips is strong enough that Nvidia could one day see its valuation climb to $8.5 trillion.

If today was any indication, it’s going to be a newsy week for Silicon Valley. Maybe all these tech companies are just making all these announcements to drown out all the coverage of AI bubble fears. If that’s the plan, it seems to be working.—LB