OpenAI Raises $110B, Becomes Key US Partner
OpenAI just closed a historic $110 billion funding round from backers like Amazon and Nvidia, pushing its valuation to an estimated $730 billion. The same day, the Trump administration banned federal agencies from using rival Anthropic's AI, citing it as a "supply risk." Hours later, OpenAI struck a deal to supply its systems to the Pentagon, cementing its position as the U.S. government's preferred AI provider.
This latest funding round is one of the largest private capital raises on record, with significant contributions of $50 billion from Amazon, $30 billion from Nvidia, and $30 billion from SoftBank. This infusion of cash is aimed at securing the advanced AI chips and computing power necessary for OpenAI to maintain its lead in the rapidly advancing AI industry. The deal with Amazon also includes an expanded partnership for OpenAI to utilize Amazon's custom Trainium AI chips, demonstrating a strategic move to diversify its hardware infrastructure. Microsoft, a long-standing partner and major investor, has stated that its exclusive license and intellectual property access with OpenAI remain unchanged by this new funding round. The U.S. government's ban on Anthropic's AI stemmed from a public dispute over the company's refusal to grant the military unrestricted use of its technology. Anthropic CEO Dario Amodei declined to remove safeguards that prevent the company's AI from being used in ways that violate its safety protocols, leading to the "supply chain risk" designation. The conflict with Anthropic escalated when Defense Secretary Pete Hegseth demanded the company provide a signed document granting full access to its AI model. The administration's move has been described as an unprecedented action against a U.S. company, a designation historically reserved for foreign adversaries. OpenAI's deal with the Pentagon will involve developing "frontier AI prototypes" for a range of national security challenges, including both combat and administrative applications. This partnership is part of a broader "OpenAI for Government" initiative, which aims to help various government agencies integrate OpenAI's models into their operations. Prior to this major deal, OpenAI had already secured a $200 million contract with the Department of Defense in June 2025 to build AI tools for national defense. Until early 2025, OpenAI's own policies had barred the use of its technology for military applications. The Trump administration has been actively promoting AI adoption across federal agencies, with the General Services Administration launching a suite of AI tools called USAi, which utilizes models from several major tech companies, including OpenAI. These moves align with the administration's stated goal of strengthening American leadership in artificial intelligence. In response to the Pentagon's agreement with OpenAI, CEO Sam Altman has publicly stated that the company's core safety principles, which include prohibiting domestic mass surveillance and requiring human accountability for the use of force, have been incorporated into the deal. He also called for these same conditions to be offered to all AI companies.
