Amazon will double the value of credits it offers some startups to use its cloud infrastructure, according to CNBC, as the company faces stiff competition from Microsoft in artificial intelligence services.
Starting July 1, startups that have raised a Series A round of funding in the past year will be eligible for $200,000 in credits through AWS’s Activate program, up from $100,000 before, Amazon’s cloud unit said in an email to investors ventures this week. Startups will still be eligible for $100,000 in credits, AWS said.
Two people briefed on the changes confirmed the credit increase, although they asked not to be named because the information is private.
Matt Garman, who was recently promoted to CEO of AWS after a stint in sales and marketing, met with founders in Silicon Valley this week, the people said. Garman told executives that working with startups would always be a primary goal, one of the people said, adding that Garman described artificial intelligence companies as ideal AWS customers.
An AWS spokesperson confirmed the credit increase and Garman’s visit to Silicon Valley. The spokesperson added that in the past, the $100,000 would expire in two years, while the $200,000 credit will now expire in three years.
Amazon, which is best known for its massive online retail business, derives most of its profits from AWS, a business that started in 2006, long before rivals Microsoft and Google came to the fore. AWS leads the market, with revenue of $25 billion in the first quarter, up 17% from last year.
However, Microsoft Azure and Google Cloud are growing faster and benefit from rapidly evolving AI models. Backed by Microsoft, OpenAI launched ChatGPT in late 2022 on Azure and has since attracted a wave of AI workloads to Microsoft from companies large and small. Google has several great language models, most notably Gemini.
Amazon is trying to catch up in genetic AI and has poured billions of dollars into OpenAI challenger Anthropic.
Last month, AWS CEO Adam Selipsky announced his resignation after three years running the business, with Garman named as his successor. During Selipsky’s time at the helm, Microsoft and Google increased their share of the cloud infrastructure market. One analyst told CNBC that Microsoft “ran around” AWS in genetic AI.
Startups have long been fertile ground for cloud infrastructure companies as they try to lure ambitious founders who could build the next multibillion-dollar business.
In November, Microsoft announced a partnership with Silicon Valley accelerator Y Combinator that would provide participating startups with $350,000 in Azure credits and access to graphics processing units (GPUs) to train AI models, a spokesperson said. Microsoft has since extended the $350,000 credit incentive to other accelerators, including the AI Grant.
Startups that have registered with Microsoft Founders Hub program, which requires no prior venture funding, can receive up to $150,000 in Azure credits over four years.
In addition to the Activate offer, Amazon has a new 10-week AI accelerator program. Participants will be able to access up to $1 million in cloud credits, according to the Website.
Earlier on Friday, Amazon’s chief scientist Rohit Prasad told employees that the company had hired David Luan, co-founder and CEO of AI startup Adept, along with some of Luan’s colleagues. “Amazon also licenses Adept’s dealer technology, state-of-the-art multimodal model family and some datasets,” Adept said in a suspension.
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