Amazon will increase the value of credits for startups using its cloud infrastructure in response to increased competition from Microsoft in AI services, according to CNBC.
Starting July 1, firms that have obtained a Series A round of funding within the last year will be eligible for $200,000 in credits through AWS’ Activate program, up from $100,000 before, according to an email sent to venture capitalists this week. AWS announced that seed-stage firms will continue to be eligible for $100,000 in credits, according to two sources who pleaded anonymity.
Matt Garman, who was just named CEO of AWS after formerly leading sales and marketing, was meeting with founders in Silicon Valley this week, according to sources. Garman told the executives that partnering with startups would always be a top priority, according to one source, who added that Garman regarded AI businesses as AWS’ ideal customers.
A spokeswoman for AWS confirmed the credit increase and Garman’s visit to Silicon Valley. According to the spokesman, the $100,000 credit used to expire after one year, but it will now expire after three years.
Amazon, well known for its vast online retail operation, earns the majority of its revenue from AWS, which began in 2006, long before competitors Microsoft and Google entered the market. AWS dominates the market, with $25 billion in revenue in the first quarter, up 17% from the year before.
However, Microsoft Azure and Google Cloud are developing faster and benefiting from rapidly improving AI models. OpenAI, which is backed by Microsoft, debuted ChatGPT on Azure in late 2022 and has since garnered a surge of AI workloads from enterprises large and small. Google has several huge language models, the most notable of which being Gemini.
Amazon has been trying to catch up in generative AI, investing billions of dollars in OpenAI rival Anthropic.
Last month, AWS CEO Adam Selipsky announced his resignation after three years at the helm, and Garman was chosen as his replacement. During Selipsky’s tenure, Microsoft and Google expanded their share of the cloud infrastructure industry. One analyst said that Microsoft “ran laps around” AWS in terms of generative AI.
Startups have always been a breeding ground for cloud infrastructure firms, as they seek out ambitious founders who could establish the next multibillion-dollar business.
Microsoft established a partnership with Silicon Valley incubator Y Combinator in November, offering participating firms $350,000 in Azure credits as well as access to graphics processing units (GPUs) for AI model training, according to a spokeswoman. Microsoft has now expanded the $350,000 credit incentive to other accelerators, including the AI Grant.
In addition to its Activate program, Amazon has launched a 10-week generative AI accelerator program. Participants will get access to up to $1 million in cloud credits, according to the website.
