Amazon will double the worth of the credits it offers some startups for using its cloud infrastructure, CNBC has learned, as the corporate faces increased competition from Microsoft within the service of artificial intelligence.
Starting July 1, startups that closed a Series A funding round last 12 months will have the opportunity to get $200,000 in loans through the AWS Activate program, up from $100,000 previously, Amazon's cloud division said in an email to enterprise capitalists this week. Seed-stage startups will still have the opportunity to get $100,000 in loans, in line with AWS.
Two people briefed on the changes confirmed the credit increase but asked to stay anonymous because the knowledge is confidential.
Matt Garman, who was recently promoted to CEO of AWS after previously overseeing sales and marketing, met with founders in Silicon Valley this week, the people said. Garman told the executives that working with startups will at all times be a key focus, certainly one of the people said, adding that Garman described AI firms 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 expired after one 12 months, while the $200,000 credit will now expire after three years.
Amazon, best known for its massive online retail business, generates most of its profits from AWS, a business it launched in 2006, long before rivals Microsoft and Google entered the scene. AWS is the market leader, posting revenue of $25 billion in the primary quarter, up 17 percent from the previous 12 months.
But Microsoft Azure and Google Cloud are growing faster and benefiting from rapidly evolving AI models. With Microsoft's support, OpenAI launched ChatGPT on Azure in late 2022 and has since attracted a wave of AI workloads to Microsoft from firms large and small. Google has numerous great language models, most notably Gemini.
Amazon is attempting to catch up in the sector of generative AI and has pumped billions of dollars into OpenAI challenger Anthropic.
Last month, AWS CEO Adam Selipsky announced his retirement after three years on the helm of the corporate. Garman was named as his successor. During Selipsky's tenure, Microsoft and Google increased their share of the cloud infrastructure market. One analyst told CNBC that Microsoft had “outpaced” AWS in generative AI.
Startups have long been fertile ground for cloud infrastructure firms as they seek to draw ambitious founders who could construct the following multi-billion dollar company.
In November, Microsoft announced a partnership with Silicon Valley accelerator Y Combinator that may offer participating startups $350,000 in Azure credits and access to graphics processing units (GPUs) for training AI models, a spokesperson said. Microsoft has since expanded the $350,000 credit incentive to other accelerators, including the AI Grant.
Startups registered with Microsoft Founder Hub The program doesn’t require prior enterprise capital funding and may receive as much as $150,000 in Azure credits over 4 years.
In addition to its Activate offering, Amazon is offering a brand new 10-week generative AI acceleration program. Participants can, in line with the website.
On Friday, Amazon's chief scientist Rohit Prasad told employees that the corporate had hired David Luan, co-founder and CEO of AI startup Adept, and a few of his colleagues. “Amazon is also licensing Adept's agent technology, a family of cutting-edge multimodal models and some data sets,” Adept said in a blog entry.
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