Circular deals involving cloud services? Is Amazon joining Microsoft and Nvidia in investing $50 billion in OpenAI?

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Published on: January 30, 2026 / Updated on: January 30, 2026 – Author: Konrad Wolfenstein

Circular deals involving cloud services? Is Amazon joining Microsoft and Nvidia in investing $50 billion in OpenAI? – Image: Xpert.Digital

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While ChatGPT is breaking records worldwide, the startup is struggling behind the scenes with a massive cost explosion and an enormous need for capital. To maintain its market leadership and cover the astronomical costs of data centers and specialized AI chips, the company is reportedly in advanced negotiations for a historic funding round.

Three of the most powerful players in the tech world – Amazon, Microsoft, and Nvidia – are reportedly poised to jointly invest up to $60 billion, potentially bringing the total funding round to as much as $100 billion. Amazon, in particular, could play a key role with a potential investment of up to $50 billion.

But behind these gigantic sums lies a complex strategy: Analysts are already warning of so-called "circular investments," in which the invested capital flows directly back to the investors through the purchase of cloud services and hardware. While OpenAI has already set its sights on an IPO in 2026, which could value the company at over a trillion dollars, the question remains how sustainable the current business model actually is, given the deep losses. In fierce competition with rivals like Anthropic, Sam Altman and his team are now fighting for nothing less than the financial security of their technological dominance.

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Which companies are in talks about investing in OpenAI?

According to reports in the Wall Street Journal and the US portal The Information, three tech giants are in negotiations to inject massive amounts of capital into the AI developer OpenAI. Amazon, Microsoft, and Nvidia are reportedly in active talks to invest a total of up to $60 billion in the new funding round. These three companies would thus contribute to a funding round that is expected to reach up to $100 billion in total. The involvement of these technology companies is not coincidental but is closely linked to their existing business relationships with OpenAI.

How much money does Amazon want to invest in OpenAI?

The exact amount Amazon intends to invest in OpenAI is reported differently in various media outlets. The Wall Street Journal reports a potential investment of up to $50 billion, which would make Amazon the largest single investor in this funding round. The Information, on the other hand, cites a significantly smaller sum, between $10 and $20 billion. This discrepancy in the reports suggests that negotiations are not yet complete and the final investment amount is still being negotiated. The differing figures also underscore that the discussions are apparently still in their early stages and that various scenarios are being considered.

What investment amounts are being discussed for Nvidia and Microsoft?

According to the aforementioned media outlets, Nvidia, an existing investor, is negotiating an investment of up to $30 billion in OpenAI. Microsoft, a long-time backer of the company, is apparently discussing an investment of less than $10 billion. These differing sums are noteworthy, as they demonstrate that not all investors are seeking the same level of commitment. While Nvidia, as a chip supplier, has a strong interest in strengthening OpenAI—since this indirectly increases demand for its technologies—Microsoft appears to already have a substantial stake and therefore only wants to make a smaller additional investment.

Why does OpenAI need so much additional capital?

The reason for this massive funding round lies in OpenAI's exploding cost structure. The company is incurring significant losses that are continuously eroding the startup's capital reserves. These enormous expenses arise because OpenAI has to invest heavily in new chips and data centers. This infrastructure is necessary to run and further develop AI models like ChatGPT. Computing, training, and operating large language models requires immense computing power, which is not cheap. The high losses have raised concerns among investors and analysts, who are questioning whether OpenAI can ever become profitable.

What concerns do analysts have regarding OpenAI investments?

Analysts have warned in recent months of a potential bubble in OpenAI investments. Their argument is particularly interesting and insightful. They warn that many of the investments in and by OpenAI represent so-called circular transactions. Specifically, this means that the invested money ultimately returns to its origins via various indirect routes. A classic example of this is Nvidia. If Nvidia invests money in OpenAI, but OpenAI then uses this money to buy AI chips from Nvidia, the money ultimately circulates in a loop. The same phenomenon exists with Microsoft, which provides OpenAI with extensive cloud computing services via Azure. If Microsoft invests in OpenAI and OpenAI then uses the money to pay Microsoft for these services, a circular structure is also created. This type of investment behavior can lead to an artificial inflated valuation unless genuine external investors with real new capital enter the picture.

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Circular deal or stroke of genius: Is the OpenAI deal just a brilliant trick for AWS?

How could Amazon get involved in a similar circular business with its cloud services?

The situation at Amazon could develop similarly to that of Microsoft and Nvidia. The Information reports that the size of Amazon's investment in OpenAI could depend on other business deals the two companies are currently negotiating. Amazon apparently plans to sell OpenAI further cloud services through its subsidiary Amazon Web Services (AWS). Furthermore, Amazon also intends to offer the ChatGPT developer its own AI chips. This would lead to the same circular process already observed at Microsoft and Nvidia. Amazon would invest money in OpenAI, but this money would then flow back to Amazon, either directly or indirectly, when OpenAI purchases AWS services or Amazon's chips. This scenario underscores the structural challenge in valuing OpenAI and raises questions about the true size and significance of this funding round.

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Is OpenAI planning an IPO, and if so, when?

Yes, according to insiders, OpenAI is indeed preparing for an IPO. The Wall Street Journal reports that this move could boost the startup's market capitalization to more than one trillion dollars. This would be an astronomical valuation, positioning OpenAI alongside the world's most valuable companies. According to the insider information, OpenAI's leadership has targeted the fourth quarter of 2026 as the timeframe for the planned IPO. This would mean the listing could take place sometime between October and December 2026. This timeline is ambitious and underscores the urgency OpenAI is demonstrating in its efforts to raise capital.

What could be the reason behind OpenAI's pursuit of a rapid IPO?

A key reason for the haste surrounding a potential IPO could be competition with rival Anthropic. OpenAI wants to beat Anthropic to the punch and go public first. This makes strategic sense, as the first IPO in an emerging sector often carries significant prestige and attracts considerable attention. The company that defines the category and goes public first can gain substantial advantages in accessing capital, brand positioning, and attracting talent. Anthropic is a direct competitor of OpenAI in the field of AI development and has already made considerable technological progress. The race to the stock market is therefore not just about financing, but also about strategic positioning within the AI industry.

How did the affected companies react to the reports?

So far, the companies involved have reacted very cautiously to the public reports about the investment talks. OpenAI did not respond to a Handelsblatt inquiry regarding these talks. Amazon, Microsoft, and Nvidia have also remained silent on the negotiations. This silence is typical for sensitive funding rounds and high-level business negotiations. The companies apparently want to avoid jeopardizing the ongoing negotiations or compromising complex negotiating positions through public statements. The fact that the information has reached the media despite this secrecy suggests that there are likely individuals within the negotiating organizations who are trusted contacts of the journalists and are informing them about the progress of the negotiations.

What strategic significance does this financing round have for the participating companies?

This funding round is vital for OpenAI's survival. The company needs the capital to cover its enormous operating costs and invest in the necessary infrastructure. Without these additional funds, its rapid expansion and development could not continue. For Amazon, an investment in OpenAI represents a strategic move in the AI market. It makes the company a backer of one of the most influential AI companies and gives it access to its technology and strategy development. At the same time, the investment opens up sales opportunities for AWS and Amazon's AI chips. For Nvidia, the investment is crucial to solidifying its position as a leading chip provider for AI applications and securing long-term demand for its products. Microsoft is investing to deepen and secure its already close partnership with OpenAI. Ultimately, for all these companies, it's about remaining at the forefront of the rapidly growing and strategically important AI industry.

What impact could this investment have on the overall AI market?

This massive funding round has significant implications for the entire AI market and industry. First, it underscores the enormous capital flowing into AI companies and could stimulate further investment in the field. Second, the concentration of this investment among a few large tech companies and OpenAI could lead to market concentration, potentially stifling innovation. Third, the high valuations and the expectation of a trillion-dollar IPO could create unrealistic expectations, leading to market disappointment. Fourth, the round highlights that true AI development is extremely capital-intensive—far more so than many other technology sectors. This could mean that only companies with access to massive capital can compete, making the market more difficult for new startups. Overall, this funding round demonstrates that the AI industry is in a critical growth phase, where major capital players are consolidating and securing their positions.