Amazon’s AWS is doubling the value of cloud credits offered to some startups, aiming to bolster its position amid rising competition from Microsoft in artificial intelligence services. Beginning July 1, startups that have raised a Series A round in the past year will be eligible for $200,000 in credits through AWS’ Activate program, up from the previous $100,000. Seed-stage startups will continue to receive $100,000 in credits. This initiative aims to attract and support startups, particularly those focusing on AI.
AWS confirmed the increase in credits and noted that, unlike before, the $200,000 credit will expire in three years rather than one. Matt Garman, newly appointed CEO of AWS, emphasized during a visit to Silicon Valley that collaborating with startups remains a primary focus for AWS, identifying AI companies as ideal customers.
AWS, launched in 2006, has been Amazon’s most profitable segment, generating $25 billion in revenue in the first quarter, up 17% year-over-year. However, competitors like Microsoft Azure and Google Cloud are growing more rapidly, driven by advancements in AI. Microsoft’s partnership with OpenAI and the subsequent launch of ChatGPT have drawn significant AI workloads to Azure. Google, too, has been advancing with its large language models, including Gemini.
To keep pace in generative AI, Amazon has invested heavily in Anthropic, a challenger to OpenAI. Despite AWS’s historical market lead, Microsoft and Google have made significant gains. AWS CEO Adam Selipsky recently resigned, with Matt Garman stepping in as his successor, aiming to reclaim market momentum.
Startups represent a crucial market for cloud infrastructure providers. Last November, Microsoft partnered with Y Combinator to offer participating startups $350,000 in Azure credits and access to GPUs for AI model training. This credit incentive has been extended to other accelerators. Startups in Microsoft’s Founders Hub program can receive up to $150,000 in Azure credits over four years.
In addition to AWS’ enhanced Activate program, Amazon has launched a 10-week generative AI accelerator program, offering participants up to $1 million in cloud credits.
In further efforts to strengthen its AI capabilities, Amazon has hired David Luan, co-founder and CEO of AI startup Adept, along with his team. Amazon is also licensing Adept’s agent technology and multimodal models to advance its AI initiatives. This strategic move highlights Amazon’s commitment to expanding its influence in the competitive AI landscape.
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