Is a new OpenAI deal what Amazon's stock needs to finally come alive?

By Christine Ji

Amazon's stock is near flat this year. A reported $10 billion deal with OpenAI may energize investors - or it could fuel further fears about an AI bubble.

Amazon is set to provide more cloud-computing services to OpenAI, including access to its Trainium chips.

Amazon.com seems to be the next in line for a new multibillion-dollar deal with OpenAI. Could this be a turning point for the worst-performing "Magnificent Seven" stock this year, or will investors come to further fear an artificial-intelligence bubble?

OpenAI is in talks to raise $10 billion or more from Amazon (AMZN) and use its Trainium chips, according to a report late Tuesday by The Information. The two companies are also in talks regarding collaboration in e-commerce. CNBC also reported about the potential partnership on Tuesday, although it said that the deal amount and details were not finalized.

The agreement follows Amazon's $38 billion November agreement to provide OpenAI with access to "hundreds of thousands" of Nvidia (NVDA) graphics processing units over the course of seven years.

Read on: Amazon's new OpenAI deal offers further proof the stock has become an AI winner

Shares of Amazon were up 1.4% in premarket trading on the news. Amazon's stock is up just 1.4% year to date.

The reported deal could be another catalyst for Amazon Web Services to grow revenues and its share of the AI compute market. It could also be a vote of confidence in Amazon's custom-chip business, signaling the potential for Amazon to rent out more of its own chips in the future. The company released the latest Trainium3 model earlier this month.

For cloud providers, a growing pipeline of deals for AI compute helps them lock down future revenues and signals strength in their business. TD Cowen analyst John Blackledge wrote in a note last week that more high-profile cloud-computing deals would be key to boosting investor confidence in AWS. Prior to both OpenAI deals, AWS's backlog - or deals contracted but not yet recognized as revenue - was $200 billion. Blackledge believes AWS can grow at a 23% annualized clip from 2025 to 2030.

However, uneasiness over the sustainability of the AI trade persists, which could put a damper on investors' spirits. The practice of vendor financing - when a seller lends money to a customer to help the customer buy its products - has come under criticism by some who view the arrangements as artificially inflating demand for AI infrastructure. For OpenAI, this partnership would mark an additional commitment on top of its other AI infrastructure deals, which total over $1.4 billion in value. Amazon could be taking on additional risk with this agreement if OpenAI fails to uphold its end of the commitment.

Representatives from Amazon and OpenAI did not immediately respond to MarketWatch's request for comment.

Read: Amazon's stock is this analyst's 'best idea' for these 3 reasons

-Christine Ji

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12-17-25 0921ET