Amazon lures generative AI startups to its cloud | PitchBook

Amazon is wading into the generative AI wars with an accelerator designed to attract startups to its cloud offering, taking aim at rivals Microsoft and Alphabet.

The initiative is a bid to attract future clients away from competitors like Microsoft, which has invested heavily in ChatGPT creator OpenAI and touted its Azure Cloud Services as powering generative AI programs.

Startups will apply to be included in the 10-week Amazon Web Services generative AI accelerator program. Entrants will receive up to $300,000 in AWS credits and get access to cloud services and a host of networking and mentorship opportunities. AWS will select 10 startups to participate in the program.

While the long-standing battle for cloud supremacy between AWS, Azure and Google Cloud is coming to a head, the struggle over generative AI is just beginning. Each of the big cloud providers has jumped to add generative AI services to their offerings: Microsoft launched Azure OpenAI, which utilizes the new GPT-4, and Alphabet added Vertex AI to its Google Cloud service.

Cloud spending and growth has fallen off recently, and the leading providers have cut back sales forecasts and missed revenue targets. Now, the big tech giants are hoping generative AI can jump-start their businesses.

Leading AI startups have an almost insatiable computing demand, making them ideal customers for cloud giants, according to PitchBook analyst Brendan Burke.

“Generative AI’s eruption revitalizes cloud hyperscalers’ growth expectations and capital expenditure plan,” Burke said. “The hyperscaler that supports the largest generative AI startups may become the highest-growing vendor after this market slowdown.”

AWS is not making direct investments in the AI and machine learning companies, merely encouraging them to use AWS and fostering a relationship. Amazon has used its Alexa Fund to invest directly in startups in the past, like microphone maker Vesper, which was acquired by Qualcomm, though the fund’s investment pace has slowed over the last few years.

Amazon has already courted several generative AI startups to its cloud. Stability AI, the creator of the popular Stable Diffusion AI-generated art software, is working exclusively with AWS to train its models and provide its services. Runway, a developer of creative tools that use generative AI, has partnered with AWS and uses Amazon’s cloud to train its AI models.

“AWS was instrumental in the development and training of this groundbreaking video generation model,” Cristóbal Valenzuela, co-founder and CEO of Runway, said in a statement. “We look forward to continuing to pioneer what’s possible with generative AI together.”

The unveiling of the accelerator comes just weeks after Amazon CEO Andy Jassy announced the layoff of 9,000 additional employees at the company, some located in AWS.

Featured image by Yu Chun Christopher Wong/Shutterstock



Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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