Amazon invests $50 billion in OpenAI and refocuses AI strategy

Amazon has completed a $50 billion investment in OpenAI, giving the company an estimated 5% equity stake. The deal follows an initial $15 billion commitment earlier this year and adds $35 billion that was originally tied to milestones such as a major AI breakthrough or a public listing. The funding provides OpenAI with capital to expand its computing infrastructure and reduces its reliance on a single cloud provider, allowing Amazon Web Services to compete alongside Microsoft Azure.

At the same time, Amazon is reshaping its own AI portfolio after layoffs in its AGI division and the closure of its San Francisco AGI Lab. The company is cutting several AI projects, retaining a limited set of Nova models for existing customers, and concentrating resources on frontier model research led by Pieter Abbeel. A new foundation model is expected to be announced at the re:Invent conference later this year, signaling Amazon’s shift toward fewer, larger AI bets amid intensifying competition with Google, Anthropic and Chinese AI firms.