Amazon’s rumored OpenAI investment points to a “lack of confidence” in Nova model range

Amazon’s rumored OpenAI investment plans have drawn criticism from analysts amid suggestions the move shows a “lack of confidence” in its own in-house AI model range.

According to reports from the Wall Street Journal, the hyperscaler could invest up to $50 billion in the AI company as part of a multi-stage funding round which includes backing from Nvidia, Microsoft, and SoftBank.

While exact details on the funding remain unclear, OpenAI has been seeking suitors for an additional $100 billion in investment, largely to fund future infrastructure projects.

Amazon boasts close ties with Anthropic, a key competitor for OpenAI in the generative AI space. Amazon Web Services (AWS) has served as the company’s primary cloud provider since 2023, and in 2024 signed a fresh agreement to become the firm’s primary training and inference partner.

In recent months, reports suggest a warming of ties between Amazon and OpenAI, particularly as the latter embarked on a spending spree.

CNBC reported in December that the duo were locked in investment discussions, with OpenAI apparently keen on an agreement which would allow access to Amazon’s in-house AI chips.

What the OpenAI investment suggests

OpenAI has made no secret about its fundraising efforts over the last two years. In November 2024, the firm raised $6.6 billion in funding at a $157 billion valuation, but it hasn’t stopped there.

2025 was a whirlwind year, with the AI developer signing a host of megadeals with industry titans such as Oracle, AMD, Nvidia, and Broadcom.

For OpenAI, the aims are crystal clear: it has an insatiable appetite for compute power and it’s burning cash at an alarming rate.

The company has lined up more than $1 trillion in spending over the next decade, prompting repeated concerns about its long-term viability and whether it can meet the terms of deals signed with Oracle, for example.

With this in mind, backing from Amazon – and crucially, investment – would mark a major seal of approval for the company. From Amazon’s perspective, the situation appears rather convoluted, according to Forrester principal analyst Rowan Curran.

For Amazon to justify this investment, the deal will likely have to center around heavy use of AWS infrastructure for training and inferencing purposes, as well as use of Amazon’s in-house chips.

“Amazon’s reported coming investment in OpenAI would be a tremendous expenditure of capital that will only benefit Amazon if that money goes right into OpenAI using AWS servers for training and inferencing,” he said.

From an AI model perspective, the deal doesn’t seem to add up for the hyperscaler, which already hosts OpenAI models through its Bedrock service.

Enterprises are increasingly using a mixture of options rather than sticking with a monolithic approach to the technology – a trend that AWS sought to capitalize on with the launch of Bedrock in 2023.

“The foundation model market is not commoditized, but investments of this scale into a single company do not reflect the realities of an increasingly diverse model market, and the demands of mature customers who are using an array of models to achieve their goals, rather than a single model,” Curran commented.

Similarly, the company has invested heavily in its own in-house Nova AI model range.

Amazon unveiled the launch of the Nova models at the 2025 AWS re:Invent conference in Las Vegas. As ITPro reported in December, these models have since received an array of updates and improvements.

Notably, however, Curran suggested this could signal a “lack of confidence” in the Nova models and perhaps a growing sense of frustration at progress on this front.

“This external investment would further signal a lack of confidence in AWS's internal family of Nova models to achieve a level of functionality and usage with customers that will produce significant ROI,” he noted.

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