Amazon will double the value of credits some startups offer to use its cloud infrastructure, CNBC has learned, as the company faces growing competition from Microsoft in artificial intelligence services.
Starting July 1, startups that have raised a Series A funding round in the past year will be eligible to receive $200,000 in credits through AWS’ Activate program, up from $100,000 previously , Amazon’s cloud unit said in an email to venture capitalists this week. Seed-stage startups will still be eligible for $100,000 in credits, AWS said.
Two people informed of the changes confirmed the credit increase, although they asked not to be named because the information is private.
Matt Garman, who has newly promoted The AWS CEO, who runs sales and marketing, met with founders in Silicon Valley this week, the person said. Garman told executives that collaborating with startups would always be a top focus, the person said, adding that Garman described AI companies as AWS’s ideal customers.
An AWS spokesperson confirmed the credit increase and Garman’s visit to Silicon Valley. The spokesperson added that previously, the $100,000 credit would expire after one year, while the $200,000 credit will now expire after three years.
Amazon, best known for its massive online retail operation, gets most of its profits from AWS, a business the company launched in 2006, before rivals Microsoft and Google emerged. AWS leads the market, with $25 billion in revenue first quarterup 17% year-on-year.
But Microsoft Azure and Google Cloud are moving faster and benefiting from the rapidly evolving AI models. Backed by Microsoft, OpenAI launched ChatGPT on Azure in late 2022 and has since attracted a wave of AI workloads to Microsoft from companies large and small. Google has some of the biggest language models, most notably Gemini.
Amazon has been trying to catch up in the field of generative AI and has poured billions of dollars into rival OpenAI. mankind.
Last month, AWS CEO Adam Selipsky announced He stepped down after three years running the company, with Garman named as his successor. During Selipsky’s time at the helm, Microsoft and Google increase their market share of the cloud infrastructure market. An analyst told CNBC that Microsoft is “outpacing” AWS in generative AI.
Startups have long been fertile ground for cloud infrastructure companies as they try to attract ambitious founders who can build the next billion-dollar business.
In November, Microsoft announced a partnership with Silicon Valley accelerator Y Combinator to offer participating startups $350,000 in Azure credits and access to processing units (GPU) to train AI models, a spokesperson said. Since then, Microsoft has extended the $350,000 credit offer to other accelerator programs, including the AI Grant.
Startups that have signed up to Microsoft Founders Center program requires no prior venture funding, with up to $150,000 in Azure credits available over four years.
In addition to offering Activate, Amazon is also launching a new 10-week AI accelerator program. Participants will have access to up to $1 million in cloud credits, according to website.
Earlier on Friday, Amazon’s chief scientist, Rohit Prasad, tell the staff that the company hired David Luan, co-founder and CEO of AI startup Adept, along with several of Luan’s colleagues. “Amazon is also licensing Adept’s agent technology, state-of-the-art multimodal model line, and several data sets,” Adept said in a report. blog post.
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