Amazon Eyes $50B OpenAI Investment While Backing Its Rival

What happens when a company that's already betting on one horse decides to back its biggest rival too? That's exactly what Amazon is doing in the AI race.

CNBC confirmed Thursday that Amazon is in talks to invest up to $50 billion in OpenAI, marking a stunning strategic pivot from a company that's poured billions into OpenAI's biggest competitor, Anthropic, since 2023.

CEOs in Direct Talks

Sam Altman and Andy Jassy have been engaging in direct discussions about the potential investment, according to sources familiar with the matter. The term sheet could be signed within weeks, though details remain fluid and the final amount could change.

This isn't happening in isolation. OpenAI's broader funding round could close at around $100 billion, with SoftBank reportedly considering up to $30 billion in investment. The structure appears to favor strategic investors like Amazon, Microsoft, and Nvidia in the first wave, followed by other participants.

The Logic of Dual Betting

Amazon's move seems contradictory at first glance. Since 2023, the company has positioned Anthropic as AWS's primary cloud provider and training partner, investing heavily in the ChatGPT rival's success. Why would it now fund the competition?

The answer lies in strategic hedging. Rather than putting all eggs in one AI basket, Amazon is ensuring it benefits regardless of which company ultimately dominates. The OpenAI deal reportedly includes provisions for using Amazon's AI chips, creating another revenue stream beyond pure investment returns.

The Numbers Behind the AI Arms Race

The scale of investment reveals how seriously big tech is taking the AI revolution. Amazon expects $125 billion in capital expenditures for 2026—the highest forecast among megacap companies at the time of announcement. Last October, it opened an $11 billion data center campus specifically for Anthropic in Indiana.

To fund this AI push, Amazon is cutting costs elsewhere. Wednesday's announcement of 16,000 corporate job cuts marks the second major layoff round since October, signaling the company's willingness to sacrifice other areas for AI dominance.

Market Implications and Competitive Dynamics

This dual investment strategy reflects a broader shift in how tech giants approach emerging technologies. Instead of exclusive partnerships, companies are diversifying their AI portfolios to minimize risk and maximize influence.

For OpenAI, Amazon's investment provides crucial validation and resources as it competes with Google, Microsoft, and others. For Anthropic, it raises questions about whether shared backing dilutes Amazon's commitment to their partnership.

The Regulatory Wild Card

Amazon's strategy also anticipates potential regulatory challenges. By investing in multiple AI companies rather than acquiring them outright, the company may face less antitrust scrutiny while still gaining significant influence over the sector's direction.

This approach contrasts with Microsoft's deeper integration with OpenAI, which has already drawn regulatory attention in multiple jurisdictions.