Amazon is doubling value of credits for some startups to build on AWS as Microsoft cloud gains ground

Amazon
will
double
the
value
of
credits
it
offers
some
startups
to
use
its
cloud
infrastructure,
CNBC
has
learned,
as
the
company
faces
heightened
competition
from


Microsoft
in
artificial
intelligence
services.

Starting
July
1,
startups
that
have
raised
a
Series
A
round
of
funding
in
the
past
year
will
be
eligible
for
$200,000
in
credits
through
AWS’
Activate
program,
up
from
$100,000
before,
the
Amazon
cloud
unit
said
in
an
email
to
venture
capitalists
this
week.
Seed-stage
startups
will
still
be
eligible
for
$100,000
in
credits,
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
was

recently
promoted
to
CEO
of
AWS
after
running
sales
and
marketing,
was
meeting
with
founders
in
Silicon
Valley
this
week,
the
people
said.
Garman
told
the
execs
that
collaborating
with
startups
would
always
be
a
primary
focus,
one
of
the
people
said,
adding
that
Garman
described
AI
companies
as
AWS’
ideal
customers.

An
AWS
spokesperson
confirmed
the
increase
in
credits
and
Garman’s
visit
to
Silicon
Valley.
The
spokesperson
added
that
in
the
past,
the
$100,000
would
expire
in
one
year,
while
the
$200,000
credit
will
now
expire
in
three
years.

Amazon,
which
is
best
known
for
its
massive
online
retail
operation,
derives
most
of
its
profit
from
AWS,
a
business
it
launched
in
2006,
well
before
rivals
Microsoft
and
Google
hit
the
scene.
AWS
leads
the
market,
with
$25
billion
in
revenue
in
the

first
quarter,
up
17%
from
a
year
earlier.

But
Microsoft
Azure
and
Google
Cloud
are
growing
more
quickly,
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
to
Microsoft
from
companies
big
and
small.
Google
has
a
number
of
large
language
models,
most
notably

Gemini.

Amazon
has
been
trying
to
catch
up
in
generative
AI
and
has
poured
billions
of
dollars
into
OpenAI
challenger

Anthropic.

Last
month,
AWS
CEO
Adam
Selipsky

announced
his
resignation
after
three
years
running
the
business,
with
Garman
named
as
his
successor.
During
Selipsky’s
time
at
the
helm,
Microsoft
and
Google

increased
their
share
of
the
cloud
infrastructure
market.
One
analyst
told
CNBC
that
Microsoft
“ran
laps
around”
AWS
in
generative
AI.

Startups
have
long
been
fertile
ground
for
cloud
infrastructure
companies,
as
they
try
and
lure
ambitious
founders
who
could
be
building
the
next
multibillion-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)
for
training
AI
models,
a
spokesperson
said.
Microsoft
has
since
extended
the
$350,000
credit
incentive
to
other
accelerators,
including
the
AI
Grant.

Startups
enrolled
in
Microsoft’s

Founders
Hub
program,
which
doesn’t
require
previous
venture
funding,
can
receive
up
to
$150,000
in
Azure
credits
over
four
years.

In
addition
to
its
Activate
offering,
Amazon
has
a
new
10-week
generative
AI
accelerator
program.
Participants
will
be
able
to
access
up
to
$1
million
in
cloud
credits,
according
to
the

website.

Earlier
on
Friday,
Amazon’s
head
scientist,
Rohit
Prasad,

told
employees
that
the
company
has
hired
David
Luan,
co-founder
and
CEO
of
AI
startup
Adept,
along
with
some
of
Luan’s
colleagues.
“Amazon
is
also
licensing
Adept’s
agent
technology,
family
of
state-of-the-art
multimodal
models,
and
a
few
datasets,”
Adept
said
in
a

blog
post.

WATCH:

AWS
will
boost
investments
in
Singapore’s
cloud
infrastructure
by
$9
billion