12:32 PM EST, 11/03/2025 (MT Newswires) -- Amazon.com ( AMZN ) secured a $38 billion deal with OpenAI that allows the Microsoft ( MSFT )-backed (MSFT) artificial intelligence research lab to run its workloads on Amazon's ( AMZN ) cloud computing division.

As part of the deal, the ChatGPT parent gets access to Amazon Web Services' infrastructure comprising "hundreds of thousands" Nvidia ( NVDA ) chips under the seven-year partnership, Amazon ( AMZN ) and OpenAI said on Monday.

Full capacity is expected to be deployed before the end of 2026, with an option to extend the partnership beyond next year, the statement said.

"As OpenAI continues to push the boundaries of what's possible, AWS' best-in-class infrastructure will serve as a backbone for their AI ambitions," AWS Chief Executive Matt Garman said. "The breadth and immediate availability of optimized compute demonstrates why AWS is uniquely positioned to support OpenAI's vast AI workloads."

Shares of Amazon ( AMZN ) were up 4.6% intraday, while Microsoft ( MSFT ) rose 0.2%. Shares of Nvidia ( NVDA ), which didn't immediately respond to MT Newswires' request for comment, climbed 3.2%.

"Scaling frontier AI requires massive, reliable compute," OpenAI CEO Sam Altman said. "Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone."

The partnership is "a continued move in the right direction" for Amazon ( AMZN ), Wedbush Securities analysts including Scott Devitt said in a note.

"We think momentum will continue for the segment, and we highlight that AWS growth on a 2-year stacked basis has accelerated sequentially over the last five quarters, implying strong underlying performance when accounting for comp dynamics," Devitt said.

Wedbush raised the price target on Amazon ( AMZN ) to $340 from $330, while reiterating its outperform rating on the stock.

The AWS deal is the latest in a string of AI collaborations for OpenAI.

In September, CoreWeave ( CRWV ) expanded its partnership with OpenAI, securing a new contract worth up to $6.5 billion to help the AI research lab boost its computing power. Last month, Advanced Micro Devices' ( AMD ) said it agreed to deploy 6 gigawatts of its GPUs to power OpenAI's infrastructure, while Broadcom ( AVGO ) agreed to deploy 10 gigawatts of custom AI accelerators for OpenAI.

Last week, Amazon ( AMZN ) reported third-quarter results above Wall Street's estimates amid stronger-than-expected sales growth at AWS, which Morgan Stanley said is positioned for faster growth ahead.

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