Amazon Invests $230 Million in AI Startups with Cloud Credits

(Reuters) – Amazon has announced an investment of $230 million in Amazon Web Services (AWS) credits specifically for artificial intelligence startups. This move highlights the ongoing competition among cloud providers to attract AI clients from the early stages of their development.

These credits will grant early-stage generative AI startups free access to essential computing power, a range of AI models, and the necessary infrastructure, provided they build their businesses on the AWS platform.

Amazon already offers $1 billion in cloud credits annually to various startups, with this new initiative focusing particularly on generative AI ventures.

“They’ll be able to iterate very quickly and pivot very quickly as necessary. Then ultimately, when they hit on that home run, they’ll be able to double down and get to the scale with security, responsibility, and consistency,” said Matt Wood, vice president of AI Products at AWS.

A portion of the credits will also benefit 80 early-stage companies worldwide through the AWS Generative AI Accelerator program. Each startup accepted into the accelerator could receive up to $1 million in AWS credits.

Offering cloud credits is a common strategy among cloud providers, including Microsoft Azure and Google Cloud, to attract enterprises to their services, as the costs of cloud usage can increase significantly as a company grows.

Earlier this year, Amazon expanded its cloud credits to include the use of models from providers such as Anthropic, Meta, Mistral AI, and Cohere, aiming to increase the market share of its AI platform.

The rising demand for AI has boosted the usage of cloud services, contributing to the rapid growth of cloud providers. For example, AWS’s revenue increased by 17% to $9.42 billion in the first quarter, exceeding analyst expectations. However, the investment by tech giants in AI startups has also drawn attention from regulators over potential antitrust issues.

Howard Wright, the global head of Startups at AWS who managed relationships with startups, recently left the company, according to sources familiar with the matter. Amazon declined to comment on his departure.

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