Amazon to lure upstarts with $500K in AWS AI credits each

Come on in, drill into Anthropic and Mistral – that's not the sound of a door slamming shut behind you

Amazon will furnish recent AI startups partnered with Y Combinator with $500k in credits each on Amazon Bedrock to use with third-party models like Anthropic and Mistral AI.

Normally, AWS gives out $100k in free credits to startups partnered with an Activate Provider, but the latest round of Y Combinator-funded startups will be getting five times that amount. For comparison, Microsoft offers up to $150k in credits for Azure, and Google gives a $350k specifically for AI startups, and $200k for those that don't work with AI.

"We partner with venture capital firms and startup organizations like the Y Combinator all over the world and those strategic partners receive specific packages tailored to the needs of their portfolio companies," an Amazon representative told The Register. This opens up the possibility that Amazon might throw even more credits at future startups.

In the past three years, AWS says it's given Y Combinator firms over $125 million in free credits. However, the total budget for their AWS giveaway in the past ten years is $6 billion.

AWS credits (including the $500k set aside for Y Combinator firms) can also finally be used on third-party AI models that Amazon Bedrock hosts. One of the most notable is Anthropic, which was just recently injected with $4bn from Amazon itself. Not only will these free credits take a load off of cash-strapped startups, it also boosts the cashflow of Anthropic even more beyond what Amazon has already given it.

Those AWS credits can also be used on models from Meta (which maintains LLaMA), Mistral AI, Stability AI, Cohere, and AI21 Labs. 

Previously, AWS credits couldn't be used to redeem time to use AI models from third parties, and instead startups were billed on a pay-as-you-go basis. This not only limited what AWS credits could be used for, be it $100k or $500k, but also wasn't ideal for those wanting to try out other models.

"We hope this will allow startups to experiment with these models in the same way they can use their AWS Activate credits to experiment with other AWS services, with little to no upfront costs," Amazon opined.

You know who doesn't like free credits? The FTC, probably

While Amazon, Google, Microsoft, and startups probably all like the idea of giving out hundreds of thousands of dollars in runtime for AI workloads, the FTC and similar watchdogs may disagree. The FTC has been probing the three tech giants plus Anthropic and OpenAI (creator of ChatGPT) since January over concerns that these kinds of practices might be anticompetitive. The European Commission similarly launched an inquiry into Microsoft and OpenAI.

This isn't a legal investigation (yet), but merely a "study" in the words of Lina Khan, who today serves as the FTC's chairwoman. Khan is likely to be a bit skeptical of Amazon's credit scheme given that in 2017 she wrote an article titled Amazon's Antitrust Paradox published in the Yale Law Journal, in which she argues that Amazon's business model has been able to defy present antitrust laws.

On the one hand, it might reflect well for Amazon that it works with lots of third parties for AI models, which aren't exclusive to AWS. On the other hand, giving out so many free credits is probably a big issue for the FTC no matter what.

Plus, Amazon has already been hit with an FTC lawsuit over its e-commerce business, making it clear that the consumer watchdog really isn't a big fan of Amazon at all. ®

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