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Shares of Amazon (NASDAQ: AMZN) soared 4.9% in afternoon trading after the e-commerce and cloud computing giant announced a landmark $38 billion, multi-year partnership with OpenAI, the creator of ChatGPT. The strategic deal, spanning seven years, grants OpenAI extensive access to Amazon Web Services (AWS) infrastructure, including hundreds of thousands of Nvidia GPUs, to run and scale its artificial intelligence workloads.
The announcement marked OpenAI’s first major cloud collaboration outside of Microsoft, signaling a major win for Amazon’s cloud division. Coupled with Amazon’s strong third-quarter earnings, investors responded enthusiastically, pushing the company’s market value higher by nearly $140 billion.
AWS Growth Accelerates with OpenAI Deal
Amazon Web Services has been a consistent growth engine for the tech giant. In the third quarter, AWS posted $33 billion in sales, a 20% year-over-year increase, the fastest growth the cloud division has seen since 2022. This new agreement with OpenAI reinforces AWS as a key platform for AI innovation, providing the cloud giant with both prestige and significant revenue potential.
The partnership allows OpenAI to tap into Amazon’s global cloud infrastructure and GPU resources, which are critical for training and deploying large-scale AI models like ChatGPT. Analysts interpret this collaboration as a strategic play to compete with Microsoft, which has been OpenAI’s primary cloud partner up to now.
Amazon’s Broader Financial Performance
Amazon’s Q3 financial report also highlighted strength across key business units. Net sales climbed 13.4% year-over-year to $180.2 billion, surpassing analysts’ expectations. Earnings per share came in at $1.95, comfortably beating Wall Street forecasts.
The AWS division stood out as a highlight, while Amazon’s advertising business grew 21.4%, reflecting healthy demand for the company’s digital ad services. Although operating profit slightly missed estimates, excluding two one-time charges, Amazon would have exceeded analyst predictions, underscoring the underlying strength of its core operations.
Stock Performance and Market Reaction
Following the OpenAI deal, Amazon shares closed at $254.07, up 4.1% from the previous close, reaching a new 52-week high. The stock has appreciated 15.2% year-to-date, reflecting both investor confidence in AWS and the broader growth trajectory of the company.
Despite relatively low volatility—Amazon has seen only six moves greater than 5% over the past year—today’s gain highlights that the market views the OpenAI deal as significant. It may not fundamentally alter Amazon’s business model, but it reinforces the company’s position as a dominant player in cloud computing and AI services.
The Strategic Importance of the OpenAI Partnership
Industry observers see the deal as a game-changer for Amazon’s AI strategy. By providing OpenAI with access to critical infrastructure, the company strengthens its competitive moat in cloud services. Furthermore, it signals AWS’s continued evolution as a preferred platform for high-demand AI workloads, a market that is expected to grow exponentially in the coming years.
For OpenAI, the agreement diversifies cloud support beyond Microsoft, potentially increasing its operational flexibility and scaling capacity. For Amazon, it cements the cloud division’s reputation as an indispensable partner for AI innovators.
Investor Takeaways
Investors who acquired Amazon shares five years ago would now see a $1,000 investment grow to approximately $1,665, highlighting the company’s long-term resilience. The combination of strong quarterly results, robust AWS growth, and a high-profile AI partnership reinforces confidence in Amazon’s future potential.
While some market watchers caution that Amazon’s core e-commerce business faces competition, the AWS and AI segments continue to drive growth, offering a strategic buffer against retail pressures. The OpenAI deal serves as a clear signal of Amazon’s forward-looking strategy, prioritizing cloud dominance and leadership in artificial intelligence.
Amazon’s $38 billion OpenAI cloud deal represents more than just a headline—it signals a strategic pivot toward becoming the go-to cloud provider for AI innovation. Backed by robust Q3 performance and investor enthusiasm, Amazon’s shares have surged, reinforcing the company’s reputation as both a tech giant and a long-term growth story.
