AWS boosts startup credits, challenges Microsoft in AI cloud battle

AWS plans to substantially enhance its support for startups utilising its cloud infrastructure in response to escalating competition in the AI services sector, particularly from Microsoft.

According to CNBC, AWS will double the value of credits offered to certain startups through its Activate program. Starting this July, startups that have recently secured Series A funding will be eligible for enhanced credits of $200,000, a step up from the prior $100,000. Seed-stage startups continue to qualify for $100,000. The revised $200,000 credit will also benefit from an extended three-year expiration period, previously set at one year.

New leadership

The recent leadership transition at AWS, with Matt Garman, the former head of sales and marketing, now serving as CEO, aligns with strategic engagements with startup founders in Silicon Valley. According to those familiar with these interactions, Garman has made clear AWS’s intent to collaborate closely with startups, particularly pointing out AI companies as ideal cloud platform customers.

AWS dominates the cloud infrastructure sector, having achieved $25 billion in revenue in the first quarter of 2023, marking a 17% increase year-over-year. The company states that it supports over 280,000 startups, with 96% of ‘unicorns’ in the AI and machine learning sectors using its services.

Nevertheless, the cloud computing landscape is rapidly transforming. Google Cloud and Microsoft Azure are accelerating ahead, especially by harnessing advancements in AI. Microsoft has gained considerable ground, especially after its OpenAI partnership ushered in ChatGPT, which has funnelled a significant number of AI-driven projects to Azure since the end of 2022.

Facing increasing competition, Amazon has ramped up its AI investments, pouring billions into Anthropic, a rival to OpenAI. Additionally, AWS is broadening its support for AI-driven startups, having launched a 10-week generative AI accelerator program that provides up to $1 million in cloud credits to participants.

This growing competition is reflected in shifts within market shares. AWS maintains leadership, but its market share has slightly fallen from 32% to 31% over three years. In contrast, Azure has enjoyed a robust increase from 19% to 25%, and Google Cloud has similarly increased its market share.

Expanding AI capabilities

The competitive landscape that Amazon navigates extends beyond just cloud infrastructure. In a strategic expansion into AI, Amazon has hired David Luan, Adept’s co-founder and CEO, along with several colleagues. This move, combined with the acquisition of licenses for Adept’s agent technology and multimodal models, emphasises Amazon’s commitment to advancing its AI capabilities.

The escalating competition among cloud providers is resulting in better conditions and increased support for startups. For example, Microsoft’s offerings include $350,000 in Azure credits for startups in accelerators such as Y Combinator and AI Grant, and up to $150,000 in credits over four years through their Founders Hub program for startups without previous venture backing.

With the continued growth of the cloud and AI sectors, these bold steps from titans like Amazon, Microsoft, and Google will be key in defining the evolution of technology and startup ecosystems. This means that more support and resources could allow next-generation AI and cloud-based technologies to be developed at faster paces within large tech companies.

(Photo by Marques Thomas)

See also: AWS expands in Asia-Pacific with new infrastructure region in Taiwan

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Tags: AI, AWS, cloud, machine learning, microsoft