Amazon Puts Its Money Where Its Mouth Is: Invests $35 Billion in OpenAI

Amazon has fulfilled its commitment to invest $35 billion in OpenAI, a move that signals the company's confidence in the AI technology provider. The investment was made as part of a larger deal worth $50 billion, which Amazon completed recently.

The investment was contingent on either an initial public offering (IPO) by OpenAI or the achievement of certain milestones. In its February 27 Form 8-K filing, Amazon stated that it had agreed to purchase $35 billion in OpenAI's Series C Preferred Stock, along with a separate $15 billion investment.

Amazon President and CEO Andy Jassy highlighted the company's strong revenue growth in its advertising business during an earnings call. The company reported a 26% increase in ad revenue to $19.8 billion for the quarter, driven by Sponsored Products and agentic and conversational ad experiences through products like Alexa+ and Alexa for Shopping.

Amazon Web Services (AWS) also saw significant growth, with AI revenue reaching over $25 billion, growing at triple-digit percentages year-over-year. Jassy noted that advertisers using Ads Agent targeting experienced 8% lower cost per impression and 6% lower cost per acquisition, while shoppers who clicked sponsored prompts converted to sales 48% more often and spent 21% more on average.