Amazon is increasing the value of credits it gives some companies to utilize its cloud infrastructure by double because Microsoft is becoming a more formidable competitor in the artificial intelligence services market.
The Amazon cloud unit informed venture capitalists this week that startups who have obtained a Series A round of funding within the last year will now be eligible for $200,000 in credits under AWS’ Activate program, up from $100,000 before. This change takes effect on July 1. According to AWS, seed-stage firms will still be qualified for credits worth $100,000.
The credit increase was confirmed by two persons who were briefed on the revisions; however, they requested anonymity due to the confidential nature of the material.
According to the sources, Matt Garman, who oversaw sales and marketing before being elevated to CEO of AWS, met with founders last week in Silicon Valley. One of the persons stated that Garman informed the executives that working with startups will always be a top priority and that he saw AI businesses as AWS’ ideal clients.
The rise in credits and Garman’s trip to Silicon Valley were confirmed by AWS. The $200,000 credit will now expire in three years, as opposed to the previous one-year expiration period of $100,000. A representative for the firm stated that AWS leads the cloud “by a wide margin” and that over 280,000 startups, including 96% of “unicorns” in machine learning and artificial intelligence, run on the platform.
The spokeswoman stated, “These new programs are just us doubling down on this incredible momentum.”
Amazon makes the majority of its profit from AWS, a company it founded in 2006, long before competitors Microsoft and Google appeared on the scene. Amazon is primarily renowned for its enormous online retail operation. With $25 billion in revenue in the first quarter, up 17% from a year ago, AWS leads the market.
However, Google Cloud and Microsoft Azure are expanding faster and are gaining from the quickly developing AI models. With support from Microsoft, OpenAI introduced ChatGPT on Azure in late 2022. Since then, a wave of AI workloads from both large and small businesses have come to Microsoft. Among the many extensive language models that Google has is Gemini.
Amazon has been investing billions of dollars in OpenAI competitor Anthropic in an attempt to catch up in the field of generative AI.
Garman was nominated as AWS CEO Adam Selipsky’s replacement when he announced his resignation last month, following three years as the company’s leader. Under Selipsky’s leadership, Microsoft and Google grew their market shares in cloud infrastructure.
Cloud infrastructure firms have historically found success in startups because of their ability to attract driven entrepreneurs who have the potential to create the next multibillion-dollar company.
According to a spokesman, Microsoft and Silicon Valley incubator Y Combinator announced a collaboration in November that would give participating firms access to graphics processing units (GPUs) for training AI models and $350,000 in Azure credits. Since then, Microsoft has expanded the $350,000 credit incentive to include the AI Grant among other accelerators.
Under Microsoft’s Founders Hub initiative, startups can get up to $150,000 in Azure credits over four years. The program does not require prior venture funding.
Amazon has launched a new 10-week generative AI accelerator program in addition to its Activate offering. The website states that participants will have access to cloud credits worth up to $1 million.
The CEO and co-founder of AI firm Adept, David Luan, as well as a few of Luan’s associates, have been hired by Amazon, according to a statement made earlier on Friday by the company’s chief scientist, Rohit Prasad. Adept stated in a blog post that “Amazon is also licensing Adept’s agent technology, family of state-of-the-art multimodal models, and a few datasets.”
In terms of cloud infrastructure, AWS continues to lead, but Microsoft is catching up fast. According to Canalys, Azure increased to 25% of the market from 19% in 2021, while AWS’s market share decreased to 31% in the first quarter of this year from 32% three years prior. Google is also gaining market share; as of early 2021, it held 10% of the market, up from 7%.
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