"Securing $110 Billion in Firepower"... How Sam Altman Gained the Upper Hand in the Money War and Why He Formed an Alliance with Amazon [AI Atlas]

[The Financial News] Following reports that Google had secured 46 trillion won, news has now emerged that OpenAI, led by Sam Altman, has lined up $110 billion (about 160 trillion won) in fresh capital. It looks increasingly clear that the company has seized the upper hand in the global AI money race. Amazon, Nvidia, and SoftBank are the heavyweight backers underpinning this round. As a result, OpenAI now appears to be putting some distance between itself and Microsoft, its original deep-pocketed patron.

The most notable element in this $110 billion funding package is Amazon’s participation.Amazon is investing roughly $50 billion in this round, elevating itself to the status of a core partner for OpenAI. This is widely seen as a strategic decision by OpenAI to free itself, at least partially, from the dominance of Microsoft (MS), with which it has enjoyed a close, almost exclusive relationship since its founding.Until now, OpenAI has been heavily dependent on Microsoft Azure’s cloud infrastructure. But as the scale of model training has exploded and computing costs have surged to near-unmanageable levels, Sam Altman has strong incentives to diversify infrastructure providers, which would also give him more flexibility in negotiations with MS. Anticipating that the market would read the deal this way, MS issued a joint statement with OpenAI. The two companies said, "Nothing in the announced plans changes the terms of the relationship between MS and OpenAI," adding, "Our commercial and revenue-sharing arrangements remain in place, and OpenAI’s own models will continue to run on the Azure cloud."For Amazon, this funding round appears to be an effective way to advance its strategy of gaining an edge in the AI infrastructure race. Observers say the deal gives Amazon a springboard to expand an infrastructure ecosystem built around its in-house AI chip, Trainium.SoftBank’s Masayoshi Son and Nvidia’s Jensen Huang are also central pillars of this funding round. Masayoshi Son has committed $30 billion of the capital he raised by selling down his Nvidia holdings and other assets to OpenAI. This move is part of his all-in strategy to get ahead of what he calls the coming era of Artificial Superintelligence (ASI).
Nvidia’s participation is equally significant. By joining this funding round, Jensen Huang, Nvidia’s CEO, is extending the company’s peculiar relationship with OpenAI, which mixes intense competition with deep symbiosis. Even as Altman pursues his own chip manufacturing plans that could threaten Nvidia, Huang has secured priority rights to supply Nvidia’s latest Vera Rubin architecture to the next-generation data center initiative known as the Stargate Project, which is projected to be worth around 1,000 trillion won.In effect, Altman has stitched together a vast, vertically integrated AI value chain: chip design through Arm, manufacturing and supply through Nvidia, infrastructure via Amazon Web Services (AWS) and MS, and astronomical amounts of capital from SoftBank.With this stable funding base, OpenAI is expected to accelerate its push in the AI arms race. However, as its technology becomes more widely used, the potential for social controversy is also likely to grow. On February 23, the Canadian government urgently summoned OpenAI officials to Ottawa. It had emerged that the suspect in a school shooting case had used ChatGPT to plan the attack. Although OpenAI detected the dangerous conversation and suspended the account, it did not immediately notify the police, triggering a wave of criticism over AI companies’ safety protocols and the scope of their social responsibility.
ksh@fnnews.com Kim Seong-hwan Reporter