OpenAI secures $110B funding round, announces Amazon partnership

• For context, venture capitalists invested a total of $170 billion into U.S. startups in 2023.

Zoom in: Amazon is investing $50 billion, $35 billion of which is conditioned on OpenAI meeting certain milestones.

• The companies also announced a multi-year strategic partnership that will deepen OpenAI's use of AWS infrastructure, including its custom AI chips, and bring OpenAI's enterprise AI tools more directly to AWS customers.
• Nvidia and SoftBank are both investing $30 billion.
• The new round gives OpenAI an $840 billion valuation (including the capital raised).

Longtime backer Microsoft did not participate. OpenAI and Microsoft issued a separate statement saying that their existing partnership remains unchanged — and that the Amazon deal does not alter the core terms of their collaboration.

Inside the room: There may be more to come for OpenAI. The company has spent the past two weeks meeting with sovereign wealth funds and other financial investors about adding another $10 billion to the pot, with final indications due shortly, a source familiar with the deal said.

• If vastly oversubscribed, one option would be for OpenAI's nonprofit foundation to pursue a secondary sale, given that it remains paper-rich but cash-poor. Proceeds could help fund new programs, grants and other mission-driven initiatives.

What we're watching: A major question is if federal antitrust regulators will care. This isn't a merger or acquisition, but the FTC did look into the relationship between OpenAI and Microsoft a couple of years ago.

Editor's note: This article was updated with additional information throughout.