Amazon stock just soared to a new high. It hit a record on Tuesday. This jump came after big news. OpenAI will spend billions with Amazon’s cloud service.
The tech giant’s shares climbed. They reacted to reports about OpenAI. This huge partnership shows strong trust in Amazon Web Services (AWS). It truly is today’s trending tech story.
OpenAI Commits Billions to AWS Cloud
OpenAI plans to spend a massive $38 billion. This money goes to Amazon Web Services (AWS). It covers cloud services for several years. This deal greatly boosts Amazon’s cloud business. OpenAI needs AWS for its strong AI models. They use AWS for tough training and running AI programs.
You might know Microsoft Azure also works with OpenAI. Microsoft is a key cloud partner. However, this new deal shows AWS is a top choice too. It highlights AWS’s strong market spot. AWS is a major player in AI cloud services. This move makes its role even stronger.
This commitment reinforces an earlier plan. A similar deal was first announced last October. This latest report details the huge investment. It means big, consistent business for Amazon. This positions AWS very well for future growth.
Why Amazon’s Stock Jumped Today
Amazon shares (AMZN) closed higher on Tuesday. The stock reached an amazing $191.70 earlier that day. It finished up 1.1% at $189.05. This year, the stock is already up a fantastic 20%. Are you wondering why? Huge demand for AI is pushing cloud growth.
This big deal proves AWS is a powerful leader. It competes very well with other cloud providers. Analysts are also taking note. Justin Post from BofA Securities pointed out the deal’s size. He highlighted its importance for Amazon.
Amazon also invests in other AI companies. For instance, they put money into Anthropic. This shows Amazon’s wide reach in the AI world. They are building a strong AI ecosystem.
Amazon’s cloud revenue is growing fast. It grew 17% in the first quarter of 2024. This growth signals a very healthy business. CEO Andy Jassy sees AI as a huge chance. He calls it a “multi-tens of billions” opportunity. This promises more good news for investors.
What does this mean for the future of AI? And for cloud services? The competition keeps getting hotter. Companies need very reliable online tools. AWS provides just what they need. This deal impacts the whole industry. It shows that tech’s future is in the cloud.
You can learn more about OpenAI and its projects.