Amazon & The Cost of (AI) Lateness

My word, the torrent of news keeps coming. You have hardly had time to digest the news of the $30 billion raise by Anthropic, and here we are dealing with $110 billion in new funding by OpenAI. (Well, not the entire round is done, but that doesn’t make for a splashy headline, does it? But it fits the bill for our new announcement economy befitting our unhinged now.)

TLDR of OpenAI’s news. Amazon put in $50 billion. Of that, $15 billion now and $35 billion when IPO is announced or AGI is achieved, which in itself is a hilarious set of what-ifs. Nvidia put in $30 billion, not the headliner $100 billion announced last September. SoftBank, which should be renamed as Soft(Touch)Bank, put in $30 billion. The pre-money valuation was $730 billion. Post-money, $840 billion.

Anyway, while drinking my morning coffee, I looked at the news and couldn’t help but tip my proverbial hat to Satya Nadella, CEO of Microsoft, who seems to have gotten a big honking slice of OpenAI salami at what seems like a discounted price, ridiculous it seems to be.

Amazon, on the other hand, is paying a big price for being slow, lumbering, bureaucratic, and woefully slow in getting on the “AI” bandwagon. The Seattle giant reminds me of a rich middle-aged guy from the hinterland who has finally discovered Visvim.

The right way to look at today’s news is to see what each dollar actually buys to determine who showed up early versus who showed up dumb and rich.

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Now let’s calculate the cost of being late. For Amazon, that is. It is paying $50 billion for roughly 6 percent ownership of OpenAI. That works out to about $8.3 billion per percentage point of ownership. My simplistic math assumes that Amazon will put the entire amount into the company. If it doesn’t invest the whole $50 billion, its $15 billion initial investment gets it roughly 1.8 percent of OpenAI.

Its crosstown cloud rival, Microsoft, went all in on OpenAI early and invested about $13.8 billion starting in 2019. It owned 27 percent of the company before today’s round, roughly $500 million per percentage point. After dilution from the new $110 billion raise, Microsoft’s stake is closer to 23.5 percent, worth roughly $197 billion. A 14x return. Like I said, great work, Satya.

And the returns aren’t just on paper. Last quarter, Microsoft’s net income grew by $7.6 billion from its OpenAI investment alone. The company also has $625 billion in contracted future obligations, nearly half of which comes from OpenAI. And he loses nothing with the new deal the two companies jointly announced. Microsoft still has the option to participate in this round too. I mean, the whole $110 billion isn’t done.

Microsoft really has them by the shorts.

Amazon is paying roughly 16 times more per percentage point than Microsoft did. And getting far less for it. No exclusive IP rights. No revenue share. No primary API access. Microsoft keeps all of that through 2032.

Amazon is spending nearly four times what Microsoft invested, yet would own roughly one-fifth the stake, all to be the “exclusive third-party cloud distributor” for OpenAI’s enterprise platform and a commitment to use its Trainium chips.

In other words, Amazon is really getting bupkis.

Let’s compare with its investment in Anthropic. Amazon invested $8 billion in Anthropic. Calculations based on Amazon’s SEC filings put its ownership in Anthropic at about 7.8 percent. In Q3 2025, Amazon reported a $9.5 billion pretax gain from Anthropic when the valuation jumped from $61.5 billion to $183 billion. It is a back of the envelope calculation, but it implies that it paid roughly $1 billion per percentage point.

So Amazon is paying roughly 8 times more per percentage point for OpenAI than it paid for Anthropic. And even in Anthropic, Amazon paid more than double what Google paid ($8 billion vs $3 billion) and got half the ownership (7.8 percent vs 14 percent). Sure, better late than never. But as another idiom goes, early bird gets the upside, and the winning deal dynamics.

If I am critical of Amazon, it is because they have given me a reason to do so. And the dragging their feet over “AI” and not recognizing its importance to its continued cloud dominance is a good example of a corporate whiff. In normal times, someone would have paid with their job. And now they are just paying the price. In billions.

The upfront $15 billion from Amazon is puny compared to how much money SoftBank has put into OpenAI. SoftBank’s cumulative investment in OpenAI now totals $64.6 billion, giving it approximately 13 percent ownership. It is the third-largest shareholder behind Microsoft (~23.5 percent) and the OpenAI Foundation (~22.6 percent). SoftBank has spent more actual dollars than anyone and owns less than a nonprofit that paid nothing. SoftBank liquidated its entire Nvidia stake and sold T-Mobile shares to fund these commitments. Son is going all in.

As Kenny Rogers sang in “The Gambler”

Every gambler knows that the secret to survivin’
Is knowin’ what to throw away and knowing what to keep
‘Cause every hand’s a winner and every hand’s a loser
And the best that you can hope for is to die in your sleep

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As an aside, I did a rough and ready comparison between OpenAI’s announcement and Anthropic’s last raise.

OpenAI. $840 billion post-money. 900+ million weekly ChatGPT users. 50+ million paid subscribers. Projecting $280 billion revenue by 2030. Targeting $600 billion in compute spend by 2030.

Anthropic. $380 billion valuation after a $30 billion Series G closed in February 2026. Amazon’s $8 billion investment gives it roughly 7.8 percent ownership, as implied by Amazon’s Q3 2025 SEC filing, likely diluted further after the Series G. Google holds 14 percent for roughly $3 billion, per court filings in the Google antitrust case. Nvidia and Microsoft recently invested up to $15 billion combined (approximately 4 percent at the $380 billion valuation), alongside a $30 billion compute purchase commitment from Anthropic.

Anthropic is exploring an IPO, potentially in the first half of 2026. OpenAI IPO plans are still not clear.

The valuation gap between the two, $840 billion versus $380 billion, is significant. But the cost-per-point-of-influence gap is even more telling. Amazon got primary cloud partnership, primary training partnership, and a meaningful stake in Anthropic for $8 billion. It’s getting a distribution deal and a sliver of OpenAI for $50 billion.

There is no greatness, in lateness.

February 27, 2026. San Francisco