Why Amazon’s ‘go build it’ AI strategy aligns with OpenAI’s big enterprise push

Amazon’s strategic partnership with OpenAI is a win-win for the duo, according to analysts, as the companies forge closer ties on infrastructure and AI development.

The pair announced a multi-year deal last week that will see Amazon invest $50 billion in the AI developer, building on a £38 billion pledge made in November last year.

As part of the deal, OpenAI will lean heavily on AWS infrastructure, committing to deploy 2 gigawatts of Trainium chips for its new enterprise-focused platform, Frontier. AWS will also serve as the exclusive third-party cloud distribution provider for Frontier.

OpenAI’s Frontier platform allows businesses to build and deploy AI applications and agents. As ITPro reported last month, the platform is a key focus for the firm as it looks to ramp up enterprise adoption rates.

The company has since brought in consultancies to act as systems integrators for customers to streamline adoption processes.

Elsewhere, the deal will see the duo create a ‘Stateful Runtime Environment’ through Amazon Bedrock, again with a focus on development and deployment. This will allow AWS customers to build generative AI apps and agents at “production scale”

“Stateful developer environments are the next generation of how frontier models will be used, seamlessly enabling models to access elements like compute, memory, and identity,” AWS said in a statement last week.

“A Stateful Runtime Environment allows developers to keep context, remember prior work, work across software tools and data sources, and access compute.”

Mutually beneficial ties

From Amazon’s perspective, the partnership allows the hyperscaler to continue pushing ahead with its “go build it” approach to AI, according to Lee Sustar, principal analyst at Forrester.

Amazon’s AI strategy has centered largely around its Amazon Bedrock service, which allows customers to build and deploy AI solutions in a similar vein to OpenAI’s Frontier. It has since built on this with the launch of AgentCore, enabling enterprises to create custom agents.

With OpenAI’s sharpened focus on enterprise adoption, this represents a mutually beneficial partnership aimed at both pushing broader enterprise uptake while helping AWS capitalize on lucrative infrastructure deals signed by competitors.

“The OpenAI-AWS deal is the latest example of the hyperscalers’ complicated dance with the big AI players,” Sustar said. “AWS has doubled down on its traditional “go build it” approach with AI, which means it must have partnerships like this.”

“Notably, it gives AWS exclusive third-party cloud distribution with OpenAI Frontier, potentially giving AWS a competitor to Azure OpenAI Services as well as Google Cloud offerings,” he added.

Diversification continues

OpenAI’s Trainium commitment marks a huge win for AWS, Sustar noted, allowing the company to “build a rival GPU ecosystem alternative to Nvidia”.

Like Google, Amazon has invested heavily in its in-house chip capabilities over the last five years in a bid to reduce reliance on Nvidia hardware.

The move also highlights OpenAI’s continued efforts to diversify infrastructure and hardware options.

OpenAI’s once-exclusive ties with Microsoft saw it lean heavily on Azure infrastructure, but over the last year the company has secured a slew of agreements with industry stakeholders on compute capacity and chips.

The company signed a landmark deal with Oracle on compute capacity, for example, while October saw it sign a multi-billion dollar deal with AMD to use six gigawatts of AMD GPUs.

In the wake of the Amazon agreement, Microsoft and OpenAI issued a joint statement insisting the partnership remains “strong and central”.

Amazon is hedging its bets

While OpenAI is diversifying its infrastructure partners, closer ties with Amazon also highlight the latter’s efforts to broaden its own AI partners.

Anthropic, for example, initially acted as Amazon’s champion in a similar light to the relationship between OpenAI and Microsoft.

Amazon, along with Google Cloud, has invested heavily in Anthropic over the last three years through multiple funding pledges. The company’s Claude models are also used extensively by the hyperscaler, powering products such as Alexa+.

While the deal might have raised questions about the ongoing relationship with Anthropic, Amazon CEO Andy Jassy poured cold water on any speculation last week.

Speaking to CNBC, Jassy said the current deal with OpenAI won’t change relations with the firm's long-time competitor.

“That relationship will stay strong, and we’re really excited about the partnership we’re building over a long period of time with OpenAI,” he told the broadcaster.

FOLLOW US ON SOCIAL MEDIA

Make sure to follow ITPro on Google News to keep tabs on all our latest news, analysis, and reviews.

You can also follow ITPro on LinkedIn, X, Facebook, and BlueSky.