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Amazon’s $38 Billion OpenAI Deal Signals Major Comeback in the AI Race

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Amazon has struck a $38 billion cloud deal with OpenAI, marking a significant win for the company’s Amazon Web Services (AWS) division and a major step toward reclaiming lost ground in the artificial intelligence boom. The agreement comes after Amazon had faced mounting criticism for lagging behind rivals Microsoft and Google in securing AI partnerships and deploying consumer-facing language models.

After years of dominance in the cloud industry, Amazon’s market share slipped to 29% by September — down from 34% before ChatGPT’s debut in 2022, according to Synergy Research Group. The new partnership with OpenAI, however, suggests AWS is regaining momentum. The deal will allow OpenAI to use Amazon’s infrastructure, including its custom-built Trainium chips, to train next-generation models.

Analysts said the collaboration, though smaller than OpenAI’s $250 billion commitment with Microsoft’s Azure or Oracle’s $300 billion deal, is strategically vital for Amazon. “It’s a key first step in Amazon’s effort to partner with a company that will spend over a trillion dollars on computing power in the coming years,” said Mamta Valechha of Quilter Cheviot.

The announcement sent Amazon’s shares up 5%, hitting a record high. The company has recently expanded its AI footprint, including the launch of Project Rainier, an $11 billion AI data center in Indiana where models from startups like Anthropic are being trained. CEO Andy Jassy is also pushing a leaner management structure to boost efficiency, as Amazon plans to spend around $125 billion in capital expenditures this year — outpacing Alphabet’s $93 billion.

Analysts expect the OpenAI partnership to increase AWS’s backlog by about 20% in the fourth quarter, potentially adding $40 billion in future revenue.

Amazon Shares Soar as AI Boom Drives AWS Cloud Growth and Record Investor Optimism

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Amazon shares surged more than 11% in early trading on Friday after its cloud computing arm, Amazon Web Services (AWS), reported strong growth and a bullish sales outlook that reassured investors of its position in the AI race.

AWS revenue rose 20% in the third quarter, reaching $33 billion — more than double Google Cloud’s $15.16 billion — cementing Amazon’s dominance in the cloud market. While Microsoft Azure’s 40% growth outpaced AWS in percentage terms, analysts said the scale of AWS’s business made its rebound even more significant.

“There were concerns about AWS losing market share to Microsoft and Google,” said Jed Ellerbroek of Argent Capital. “But now AWS is clearly back on track — investors expected this turnaround next year, and it’s arrived early.”

The strong quarter helped Amazon’s stock outperform rivals Apple and Tesla in year-to-date gains, lifting it out of the bottom spot among the “Magnificent Seven” tech giants. CEO Andy Jassy said AWS is “growing at a pace we haven’t seen since 2022,” driven by soaring demand for AI and infrastructure services.

Beyond cloud computing, Amazon’s retail and advertising segments also delivered impressive results. Retail sales grew 11% year-over-year, while ad revenue surged 24% to $17.7 billion, boosted by expanded placements across Echo devices and grocery stores. Following the results, at least 23 brokerages raised their price targets for Amazon, reflecting renewed confidence in the company’s long-term AI strategy.

OVHcloud Shares Plunge After 2026 Outlook Disappoints Despite Record €1 Billion Revenue

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OVHcloud (OVH.PA), Europe’s largest cloud provider, celebrated a major milestone on Tuesday as annual revenue surpassed €1 billion for the first time — yet its weaker-than-expected 2026 forecast sent investors fleeing. Shares plunged 18% by mid-morning, marking what could become the company’s biggest single-day drop ever if losses persist.

The firm reported 9.3% revenue growth for fiscal 2025, reaching €1.08 billion, with an EBITDA margin of 40.4%. However, its 2026 outlook disappointed the market: OVHcloud now expects organic revenue growth of just 5–7%, well below analyst projections of around 10%, according to Stifel and J.P. Morgan.

In response, the company pledged to improve profitability by targeting a higher core profit margin while maintaining capital expenditures at 30–32% of revenue to bolster its Webcloud segment. The results come as founder Octave Klaba returns as CEO, merging his chairman role to lead the company’s next phase of expansion. Klaba, who owns more than 80% of OVHcloud, previously served as CEO until 2018.

Klaba said the firm will focus on meeting rising AI-driven cloud demand and promoting European digital independence amid global tech rivalries. OVHcloud continues to expand globally, citing growing client bases in Canada, Singapore, and India, while remaining a key competitor to Amazon Web Services, Microsoft Azure, and Google Cloud.

By segment, Private Cloud accounted for 62% of sales, growing 8.5%, Public Cloud rose 17.5% (20% of revenue), and Webcloud increased 3.7% (18% of total). OVHcloud serves 1.6 million clients, including 1,200 enterprise customers generating over €100,000 in annual recurring revenue.