Shares of Amazon (AMZN +3.99%) jumped on Monday, finishing the day up 5%. The move higher came as the S&P 500 gained 0.1% and the Nasdaq Composite rose 0.4%.
The tech behemoth inked a major deal to provide OpenAI with $38 billion worth of artificial intelligence (AI) computing capacity.
NASDAQ: AMZN
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Amazon and OpenAI team up
Announced this morning, the deal is the first between OpenAI and what is already the largest cloud computing provider in the world. OpenAI will begin using Amazon Web Services (AWS) servers immediately, making use of hundreds of thousands of Nvidia chips to power its AI models.
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Dave Brown, vice president of compute and machine learning services at AWS, told reporters that "It's completely separate capacity that we're putting down," and that some is already available and being utilized. AWS will need to continue to expand its capacity, however, to meet the enormous demands of the contract.
Amazon is delivering on multiple fronts
Amazon continues to execute and drive growth on its top and bottom lines. Its dominance in e-commerce is unmatched, and its advertising business is delivering strong growth. AWS, already the top dog in cloud computing, is growing rapidly in the age of AI. Amazon is a buy.
