Amazon Amazon is doubling the amount of credits it offers to some startups to use its cloud infrastructure, CNBC has learned, as the company faces increasing competition from Microsoft In artificial intelligence services.
Starting July 1, startups that raised a Series A funding round last year will be eligible for $200,000 in credits through the AWS Activate program, up from $100,000 before, Amazon's cloud unit said in an email to venture capitalists. Investment funds this week. AWS said seed-stage startups will still be eligible for $100,000 in credits.
Two people briefed on the changes confirmed the credit increase, though they asked to remain anonymous because the information is private.
Matt Jarman, who was recently promoted to CEO of AWS after running sales and marketing, was meeting with founders in Silicon Valley this week, the people said. Jarman told executives that collaborating with startups will always be a key focus, one of the people said, adding that Jarman described AI companies as ideal customers for AWS.
An AWS spokesperson confirmed the increased credits and Jarman’s visit to Silicon Valley. The spokesperson added that in the past, the $100,000 credit was set to expire in one year, while the $200,000 credit will now expire in three years.
Amazon, which is known for its massive online retail operations, derives most of its profits from AWS, a company it launched in 2006, long before rivals Microsoft and Google came on the scene. AWS leads the market, with revenues of $25 billion in the first quarter, an increase of 17% from the previous year.
But Microsoft Azure and Google Cloud are growing more quickly, and benefit from rapidly advancing 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 a number of large language models, most notably Gemini.
Amazon is trying to catch up on generative AI and has poured billions of dollars into OpenAI competitor Anthropic.
Last month, AWS CEO Adam Selipski announced his resignation after three years at the helm of the business, and Jarman was named his successor. During Selipski's time at the helm of the company, Microsoft and Google increased their share of the cloud infrastructure market. Microsoft has “made the rounds” on AWS in the generative AI space, one analyst told CNBC.
Startups have long been fertile ground for cloud infrastructure companies, trying to attract ambitious founders who might build the next billion-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 expanded the $350,000 credit incentive to other accelerators, including the AI Grant.
Startups registered in Microsoft's Founders Hub program, which does not require upfront funding, can receive up to $150,000 in Azure credits over four years.
In addition to its Activate offering, Amazon is offering a new 10-week Generative AI Accelerator program. Participants will have access to up to $1 million in cloud computing credits, according to the website.
Earlier Friday, Amazon’s chief scientist, Rohit Prasad, told employees that the company had hired David Loan, co-founder and CEO of AI startup Adept, along with some of Loan’s colleagues. “Amazon is also licensing Adept’s agent technology, a suite of state-of-the-art multimodal models, and a handful of datasets,” Adept said in a blog post.
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