OpenAI's Dominant Day: $110B Raise, Pentagon Deal
OpenAI just closed a record-shattering $110 billion funding round led by Amazon, Nvidia, and SoftBank, rocketing its valuation to $730 billion. In a parallel move, the Pentagon signed a major deal with OpenAI just hours after the Trump administration banned federal agencies from using rival Anthropic's tech, citing "supply risk."
The record-breaking $110 billion investment in OpenAI includes $50 billion from Amazon, and $30 billion each from Nvidia and SoftBank. This single round is more than triple the size of Saudi Aramco's entire IPO, which was the largest in history. The deal catapults OpenAI's valuation from $500 billion in October to $730 billion. Amazon's investment is not just cash; it's a strategic play. OpenAI will spend $100 billion on Amazon's cloud computing and in-house Trainium AI chips over eight years. In return, Amazon Web Services (AWS) becomes the exclusive third-party cloud provider for OpenAI's new "Frontier" enterprise platform, designed for building and managing AI agents. The Pentagon deal allows OpenAI to deploy its models on the military's classified networks. However, CEO Sam Altman secured crucial "safeguards" in the agreement, specifically prohibiting the AI from being used for autonomous weapons systems or for mass surveillance of American citizens. OpenAI will retain control over how these safety systems are applied. The ban on rival Anthropic stemmed from its refusal to grant the Pentagon "unrestricted access" to its Claude AI model for "all lawful purposes." Anthropic CEO Dario Amodei drew "bright red lines" against its AI being used for mass domestic surveillance or fully autonomous weapons, a stance the Trump administration deemed an attempt to "strong arm" the military. In response, Defense Secretary Pete Hegseth designated Anthropic a "supply chain risk to national security," a label historically used for foreign adversaries like Huawei. This order forces federal agencies and contractors to phase out Anthropic's technology over a six-month period. Anthropic, which had a $200 million government contract, has vowed to challenge the unprecedented designation in court.
