AWS’ Cloud Credits Blitz For AI Startups: 5 Huge Things To Know

AWS’ Cloud Credits Blitz For AI Startups: 5 Huge Things To Know

AWS is investing cloud credits worth hundreds of millions of dollars for AI startups as Google, Amazon and Microsoft all battle to win over the hottest startups in the world as customers.

Amazon Web Services is putting the full-court press on Microsoft and Google by giving hundreds of millions of dollars’ worth of cloud credits to AI startups as the artificial intelligence market share battle heats up.

The $100 billion cloud giant recently doubled its cloud credits offering to startups from $100,000 to $200,000 inside its AWS Activate program with the hopes to entice startups to build on AWS cloud infrastructure.

AWS also recently committed $230 million to expand its Generative AI Accelerator startup program with startups having the opportunity to receive up to $1 million in cloud credits.

[Related: The 10 Hottest Cloud Computing Startups of 2024]

However, AWS’ biggest competitors Microsoft Azure and Google Cloud are also dishing out millions of dollars in cloud credits to persuade AI startups to leverage their specific AI programs and offerings.

‘Billion-Dollar AI Startup Pursuit’ Underway

One top executive from a solution provider that partners with both Microsoft and AWS said there is a “billion-dollar AI startup pursuit” currently underway between Google Cloud, AWS and Microsoft who are all trying to lure AI startup companies to become tech experts and build AI products on top of their infrastructure.

“Google, Microsoft and Amazon are all literally throwing money at AI startups because they want them to build the next great AI product on their cloud,” said the top executive who declined to be named.

“So if AWS can get more AI startups on their cloud, it gets more AWS-certified AI experts and technical sales teams on their side,” he said. “And if they get that AI startup is on AWS, that startup will scale on AWS’ cloud, and it will be hard for them to switch to Azure or Google Cloud.”

What Are Cloud Credits?

Cloud credits help startups and partners build and scale their business providing a vendors’ suite of products and services, from AI and machine learning capabilities to server hosting and critical infrastructure.

Most importantly, these credits eliminate a huge financial barrier for many startups by offsetting costs for critical IT like compute, storage, databases, AI and more.

AI startups who are given cloud credits from a provider will most likely become a customer of that provider’s AI offerings, such as AI models and AI assistants, said the executive.

“I think these cloud credits are really a battle for AI [market share] around who’s going to win over these innovative AI startups, because they’re a very important market,” said the executive. “It’s more than just winning these startups over as customers, it’s about having these startups make the next best AI products and massively scale on their cloud.”

CRN takes a deep dive into the five biggest things you should know about AWS’ cloud credits blitz, AWS CEO Matt Garman’s thoughts on the increasing credits, and competing AI credit programs from Microsoft and Google.

AWS Doubles Cloud Credits From $100K To $200K; GenAI Startups Can Get $500K

On July 1, startup companies that have raised financial capital over the past 12 months —for example, from a series A funding round—will be eligible for $200,000 in AWS credits. Startups must join the company’s AWS Activate program.

This is double the $100,000 credits AWS was offering inside the program prior.

It is also key to note that early stage or seed-stage startups or startups that haven’t raised capital are still eligible for $100,000 in credit.

AWS also recently launched a new package of benefits inside AWS Activate specifically for generative AI startups. Those startups get access to AWS infrastructure to build GenAI applications.

This package includes up to $500,000 in AWS credits that can be used to leverage AWS Trainium and AWS Inferentia chips, as well as reserved capacity of up to 512 Nvidia H100 GPUs via Amazon EC2.

AWS Cloud Market Share Dips; Microsoft And Google’s Credits Programs

The AWS cloud credits surge comes as the longtime global leader of cloud computing has seen its market share slightly dip over the past few years, while Microsoft and Google have gained share.

As of Q1 2024, AWS worldwide cloud services market share stands at 31 percent, down from 33 percent share in Q1 2022, according to data from Synergy Research Group.

Comparatively, Microsoft’s global market share increased from 22 percent share in Q1 2022 to 25 percent share as of Q1 2024.

Google grew its market share from 10 percent share in Q1 2022 to now 11 percent share in Q1 2024.

To help win more cloud market share, Google, Microsoft and AWS are each pouring millions into offering AI startups cloud credits to use and innovate on their cloud infrastructure and AI models.

Google Cloud has launched a Google for Startups Cloud Program that offers $200,000 in cloud credits over two years. Specifically for AI startups, the program is offering up to $350,000 in credits to provide startups with Google AI products, foundation models and infrastructure.

Microsoft launched a Microsoft for Startups Founders Hub program offering $150,000 in Azure cloud credits to startups to use toward free access to generative AI models, including OpenAI GPT-4.

Additionally, Microsoft’s new Alt Capital Generate Program offers startups up to $350,000 in Azure cloud credits as well as early access to GPUs for AI models.

AWS Enables Third Party Models; Extends Credits Length To Three Years

AWS revamped its AWS Activate startup funding program recently to provide two new enhances: extending credits expiration and enabling third-party AI models.

AWS now enables credits to be used on third-party AI models that Amazon Bedrock hosts. So now credits can be used on AI models from AI superstar startups like anthropic, Meta, Cohere, Stability AI, Mistral AI and AI 21 Labs.

The cloud giant also increased its credit expiration from one year to three years.

For example, a startup previously had to use $100,000 in credits over one year or the credits would expire. Currently, the $100,000 in cloud credits won’t expire for three years with AWS saying the move will provide more flexibility to startups.

AWS Invests $230 Million In Cloud Credits For AI Startups; Up To $1 Million Per Startup

Last month, AWS said it will give away $230 million in AWS cloud credits to generative AI startups as part of its Generative AI Accelerator startup program.

AWS will admit 80 early-stage startups globally who are using generative AI to solve complex challenges. The cloud giant will provide AWS credits, mentorship and education to further a startups’ use of AI and ML technologies.

A GenAI startup can receive up to $1 million in credits. Generative AI startups can leverage the credits to access AWS compute, infrastructure, and a range of AI model services.

“With this new effort, we will help startups launch and scale world-class businesses, providing the building blocks they need to unleash new AI applications that will impact all facets of how the world learns, connects, and does business,” said Matt Wood, vice president of artificial intelligence products at AWS, in a statement.

The 10-week generative AI accelerator program matches startups with business and technical AWS experts on industry vertical with credits to help them build, train, test and launch GenAI solutions.

AWS CEO Matt Garman Talks Cloud Credits

On June 13, longtime AWS veteran Matt Garman (pictured) took over as CEO with a focus on AI.

The 18-year AWS veteran last week spoke about his company increasing cloud credits to drive AI and GenAI momentum.

“It’s no surprise that generative AI is expensive,” said Garman during an interview on CNBC. “So, one of things that startups were telling us is, ‘Hey, we love your credit program. We love using AWS. … But it’s really hard to get going in generative AI on the previous credit amount that we were giving.’ So it’s an important investment for us and that’s part of the reason why we increased the credits that we did.”

Garman said incentivizing AI startups provides AWS in several ways, including scaling customers faster and potentially winning new enterprise customers.

“There is this feeling that a startup financial services company could push a traditional bank [to AWS],” he said. “And many of the startups are now really pushing the edge of what’s possible generative AI. … [Startups] can push the traditional enterprises to realize that they kind of have to most fast too.”

Overall, AWS’ new CEO is investing in AI startups unlike ever before with the belief that GenAI is a game-changing technology now and in the future.

“I firmly believe generative AI is going to transform every single industry out there in some way, shape or form, and some of them, very materially,” Garman said.

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AWS is investing cloud credits worth hundreds of millions of dollars for AI startups as Google, Amazon and Microsoft all battle to win over the hottest startups in the world as customers. Amazon Web Services is putting the full-court press on Microsoft and Google by giving hundreds of millions of dollars’ worth of cloud credits…

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