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 a $200,000 credit through AWS’s Activate program, up from the previous $100,000 , Amazon’s cloud unit said in an email to venture capitalists this week. Seed-stage startups will still be eligible for the $100,000 credit, AWS said.
Two people briefed on the changes confirmed the credit increase, though they asked not to be named because the information is private.
Matt Garman, who has just got promoted to CEO of AWS after running 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 key focus, one of the people 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, a $100,000 credit would expire after one year, while a $200,000 credit would now expire after three years.
Amazon, best known for its massive online retail operations, gets most of its profits from AWS, a business founded in 2006, before rivals Microsoft and Google emerged. AWS leads the market with $25 billion in revenue in first quarterincreased 17% over the same period last year.
But Microsoft Azure and Google Cloud are growing faster and are benefiting 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 from companies large and small to Microsoft. Google has several major language models, the most prominent being 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 business, with Garman named as his successor. During Selipsky’s tenure, Microsoft and Google increase their stake of the cloud infrastructure market. One analyst told CNBC that Microsoft “surpassed” 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 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 offer to other accelerator programs, including AI Grant.
Startups that have signed up to Microsoft Founders Center The program does not require prior venture funding and can earn up to $150,000 in Azure credits over four years.
In addition to the Activate service, Amazon is also launching a new 10-week Generative 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, modern multimodal model family, and several datasets,” Adept said in a statement. blog post.
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