OpenAI Raises Record $110B, Inks Pentagon Deal
OpenAI has announced a massive $110 billion funding round led by Amazon and Nvidia, one of the largest in private capital history. The deal came just hours after the Trump administration ordered all federal agencies to stop using tech from rival AI firm Anthropic, citing a “supply risk.” OpenAI immediately struck a deal to supply the Pentagon with its advanced AI systems.
The $110 billion funding round is the largest private tech financing in history, valuing OpenAI at $730 billion before the inclusion of the new capital. The investment was composed of $50 billion from Amazon, $30 billion from Nvidia, and $30 billion from SoftBank. This dwarfs OpenAI's previous record-setting funding round of $40 billion in 2025. Amazon's $50 billion investment deepens its existing partnership with OpenAI. As part of the deal, OpenAI and Amazon Web Services are expanding a multi-year agreement by an additional $100 billion over eight years, with AWS serving as the exclusive third-party cloud provider for some OpenAI services. [The Trump administration's](https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFeRifWltB-_tbc0pUXY7IHhjSCdzOTgxphE6EIfF29KAz4OWcvaiE7qOrQmEeLN7_SkHvUTH3BOOpiDrx2di58yyHiClJOQ4DfOdSAh1CeUXrVU-jAQTj63iqPvtmEIQxxxa6CIS5H0oIX3--fMIbZLGYxWyxbWoXaYJmpWIQY4OMqD1Q=) move against Anthropic followed a standoff over the company's refusal to remove safety "guardrails" on its AI model, Claude. Anthropic specifically sought to prevent its technology from being used for mass domestic surveillance or in autonomous weapons systems that can operate without human input. The Pentagon had given Anthropic a deadline to allow unrestricted use of its technology, which the company refused, citing its commitment to safety. In response, Defense Secretary Pete Hegseth designated the company a "supply chain risk," a label historically applied to foreign adversaries, and President Trump ordered all federal agencies to phase out use of Anthropic's products. Until the dispute, Anthropic was one of four major AI companies with contracts to supply the Pentagon, alongside Google, OpenAI, and Elon Musk's xAI. Notably, Anthropic had been the only AI model approved for use within the military's classified systems. The new deal will see OpenAI's technology deployed on the Defense Department's classified networks. OpenAI's CEO stated that the Pentagon agreed to its safety "red lines," which were similar to those proposed by Anthropic. The Trump administration has consistently pursued a policy of "global AI dominance," aiming to accelerate innovation by removing regulatory barriers.
