Amazon’s $38 Billion OpenAI Deal Marks a New Chapter for AWS
Intermediate | November 20, 2025
✨ Read the article aloud on your own or repeat each paragraph after your tutor.
Amazon Steps Up: The Amazon $38 Billion OpenAI Deal: The $38 Billion OpenAI Agreement
On November 3, OpenAI announced it had signed a seven‑year, $38 billion deal with Amazon Web Services (AWS) — widely reported as the Amazon $38 billion OpenAI deal — to supply cloud and AI infrastructure. 3**, OpenAI announced it had signed a seven‑year, *$38 billion deal* with Amazon Web Services (AWS) to supply cloud and AI infrastructure. The deal marks a strategic turning point for Amazon, which, until recently, was viewed by many as falling behind in the AI and cloud arms race. (Reuters)
Why It Matters: From Cloud Laggard to AI Contender
Amazon’s cloud‑business share had slipped from roughly 34% to 29% as rivals such as Microsoft and Google LLC surged ahead following the rise of generative‑AI platforms like ChatGPT. (Reuters) The OpenAI deal serves as a public vote of confidence in AWS’s ability to handle large‑scale AI workloads and regain momentum. Analysts estimate it could boost AWS’s pending backlog by around 20% in the coming quarter. (Reuters)
What’s Changing Under the Hood
Under the partnership, OpenAI will gain access to “hundreds of thousands” of Nvidia GPUs and Amazon’s infrastructure, beginning immediately and scaling through 2026 and beyond. (Reuters) For Amazon, this involves massive data‑centre investments, including the company’s own Trainium chip system and a recently announced $11 billion campus in Indiana dedicated to AI computing. Amazon is also streamlining its corporate structure — cutting about 14,000 jobs — to redirect resources toward AI. (Reuters)
Bigger Picture: Opportunity and Risk
While the Amazon $38 billion OpenAI deal signals Amazon’s renewed push, it also highlights the high stakes in the AI infrastructure market., it also highlights the high stakes in the AI infrastructure market. OpenAI alone is targeting long‑term compute commitments that could exceed $1 trillion, prompting questions about sustainability. (Reuters) For Amazon, success depends on converting massive infrastructure investment into long‑term revenue growth. If AWS fails to deliver reliable compute at scale, it risks reinforcing perceptions of being a “latecomer” rather than regaining leadership.
What This Means for English Learners and Professionals
Discussing topics like this provides exposure to business English terms such as “backlog,” “compute capacity,” “vote of confidence,” “streamline,” and “infrastructure commitment.” Using real‑world tech news helps you practise higher‑level English while staying relevant in professional conversations. When you explain this deal to a colleague, you might say: “Amazon’s backlog could grow by 20% thanks to the OpenAI deal,” or “The partnership is a major vote of confidence in AWS’s AI capability.”
Vocabulary
- Deal (noun) – an agreement between two parties.
- Example: “Amazon signed a deal with OpenAI worth $38 billion.”
- Vote of confidence (noun) – an action showing trust in someone or something.
- Example: “The partnership was seen as a vote of confidence in AWS.”
- Backlog (noun) – a workload or demand that has yet to be processed.
- Example: “Analysts estimate AWS’s backlog could grow by 20%.”
- Compute capacity (noun) – the amount of computing power available.
- Example: “OpenAI will access hundreds of thousands of GPUs to expand its compute capacity.”
- Streamline (verb) – to simplify or modernise a process.
- Example: “Amazon is streamlining its business structure to focus on AI.”
- Infrastructure (noun) – the underlying physical and organisational structures needed for operation.
- Example: “AI infrastructure demands millions of dollars in investment.”
- Commitment (noun) – a pledge or undertaking to do something.
- Example: “OpenAI’s infrastructure commitments top $1 trillion.”
- Latecomer (noun) – someone or something that begins later than others.
- Example: “Amazon was considered a latecomer in the AI race.”
- Regain (verb) – to recover or obtain something again.
- Example: “AWS is trying to regain its lead in cloud computing.”
- Sustainability (noun) – the ability to continue without failure.
- Example: “Analysts question the sustainability of large AI investments.”
Discussion Questions (About the Article)
- What makes the $38 billion OpenAI‑Amazon deal significant for AWS?
- How does this deal reflect Amazon’s changing position in the AI industry?
- What risks does Amazon face as it shifts resources into AI infrastructure?
- Which English phrases from this article could you use to describe business deals?
- Do you think Amazon can turn this deal into long‑term growth? Why or why not?
Discussion Questions (About the Topic)
- What makes a company competitive in the AI arms race?
- How important is compute capacity for today’s major tech players?
- How would you explain “backlog” or “streamline” to a colleague in another country?
- What long‑term risks come with massive infrastructure commitments?
- Why should English learners in tech understand deals like this?
Related Idiom
“Bite the bullet” – to choose to do something difficult that has been delayed.
Example: “Amazon had to bite the bullet and overhaul its cloud strategy to secure this deal.”
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