Amazon Web Services Inc. (AWS) has announced a $230 million investment in AWS cloud credits for generative AI startups as part of its strategy to stay competitive in the cloud computing industry, which is increasingly focused on AI companies.
The initiative will provide early-stage generative AI startups with free credits to access AWS’s compute power, AI models, specialized infrastructure, and services, encouraging them to build their businesses on the AWS cloud platform.
AWS already allocates about $1 billion in cloud credits annually to various startups, but this initiative targets specifically emerging generative AI companies. Matt Wood, AWS’s vice president of artificial intelligence products, emphasized that the program aims to help startups launch and scale their businesses, providing essential resources to develop impactful AI applications.
The free access to AWS cloud resources will enable startups to iterate quickly and pivot as needed. When successful, these startups can scale with security and consistency, Wood added.
That’s huge news from Amazon. Investing $230M in AWS cloud credits for AI startups is a game-changer. https://t.co/jvAJf5xdeV
— Kevin L. Jackson (@Kevin_Jackson) June 14, 2024
A portion of the $230 million will fund the second cohort of Amazon’s Generative AI Accelerator program, an incubator identifying promising industry startups. Participants receive up to $1 million in AWS credits, access to AI experts, mentorship, and investor introductions. The 10-week program supports generative AI startups across various industries, including financial services, healthcare, media, entertainment, and sustainability. Additionally, participants can join Nvidia Corp.’s Inception program for further resources and expertise.
Offering free cloud credits is a common strategy among major cloud providers like Google Cloud and Microsoft Azure. These providers aim to attract startups to their platforms and hope they will become long-term customers as their need for cloud resources grows.
Earlier this year, AWS expanded its cloud credits program to offer free access to large language models from companies like Meta Platforms Inc., Cohere Inc., Mistral AI, and Anthropic PBC, accessible via the Amazon Bedrock platform. This platform also includes developer tools for building generative AI applications. The credits cover various services, including computing, storage, database technologies, and AI-focused chips like Nvidia’s GPUs, Amazon’s Trainium, and Inferentia2 processors.
Generative AI is proving lucrative for cloud providers. AWS reported a 17% revenue increase to $9.42 billion in its latest earnings report, largely driven by generative AI.
That’s huge news from Amazon. Investing $230M in AWS cloud credits for AI startups is a game-changer. https://t.co/jvAJf5xdeV
— Kevin L. Jackson (@Kevin_Jackson) June 14, 2024
However, AWS and its competitors face antitrust scrutiny over concerns they might be stifling competition through their control of AI resources. The U.S. Federal Trade Commission has launched an inquiry into tech companies’ investments in AI startups, with similar investigations underway in Europe and the U.K. No charges have been announced yet, but cloud providers have requested further information.
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