The race to control the future of artificial intelligence just took a massive leap forward with a record-shaking deal. On Wednesday, Amazon stock (AMZN) rose 1% in pre-market trading following the news that it is leading a historic $122 billion funding round for OpenAI. This investment pushes the valuation of the ChatGPT creator to a jaw-dropping $852 billion, clearing the path for what could be the largest IPO in history later this year.

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The standout detail of this deal is the scale of Amazon’s commitment. The cloud giant is pledging up to $50 billion to OpenAI, starting with an immediate $15 billion investment. For the first time, OpenAI is moving away from being solely tied to Microsoft (MSFT) by adding Amazon’s massive cloud and hardware resources to its arsenal.

As part of the agreement, OpenAI will begin using Amazon’s in-house Trainium chips. This gives the AI developer two gigawatts of new computing power, providing the engine needed to run its increasingly complex models. Other tech titans joined the party as well, with Nvidia (NVDA) and SoftBank (SFTBY) each committing $30 billion to the round, proving that the world’s biggest players are all-in on OpenAI’s vision.

OpenAI is also refining its focus as it prepares to go public. The company confirmed it is winding down Sora, its standalone video tool, to put all its energy into a new unified AI superapp. The goal is to create one single place where users can chat, write code, generate images, and browse the web without jumping between different programs.

The business numbers behind this shift are staggering. OpenAI is now bringing in $2 billion in monthly revenue and is on track to hit one billion weekly active users very soon. This explosive growth is why investors like Cathie Wood’s ARK Invest are scrambling to get a piece of the company before it hits the stock market.

With $122 billion in new funding, OpenAI now has a massive pile of cash to use for the year ahead. This gives the company all the money it needs to grow quickly before it finally joins the stock market. Experts expect this to be the last time the company raises money from private investors before its 2026 IPO. Partnering with Amazon allows OpenAI to use different cloud services and chips, which helps the company stay independent and keep its lead in the AI race.

For Amazon, the 1% pre-market bump shows that investors are excited about its deeper role in the AI world.

Turning to Wall Street, the analysts’ consensus rating for Amazon stock (AMZN) is a Strong Buy, based on 42 Buys, three Holds, and no Sell ratings issued over the past three months. With that comes an average 12-month AMZN stock price target of $284.30, representing a potential 36.5% upside for the shares.

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