Amazon says it’ll spend $230 million on generative AI startups

Amazon says that it’s going to commit as much as $230 million to startups constructing generative AI-powered applications.

The investment, roughly $80 million of which is able to fund Amazon’s second AWS Generative AI Accelerator program, goals to position AWS as a pretty cloud infrastructure selection for startups developing generative AI models to power their products, apps and services. Much of the brand new tranche — including your complete portion put aside for the accelerator program — is available in the shape of compute credits for AWS infrastructure, meaning that it may’t be transferred to other cloud service providers like Google Cloud and Microsoft Azure.

To sweeten the pot, Amazon is pledging that startups on this yr’s Generative AI Accelerator cohort will gain access to experts and tech from Nvidia, this system’s presenting partner. They will even be invited to affix the Nvidia Inception program, which provides corporations opportunities to attach with potential investors and extra consulting resources.

The Generative AI Accelerator program has also grown substantially. Last yr’s cohort, which had 21 startups, received only as much as $300,000 in AWS compute credits, amounting to around a combined $6.3 million investment.

“With this latest effort, we’ll help startups launch and scale world-class businesses, providing the constructing blocks they should unleash latest AI applications that can impact all facets of how the world learns, connects, and does business,” Matt Wood, VP of AI products at AWS, said in a press release.

Amazon’s growing spending on generative AI tech, which incorporates efforts like its $100 million AWS Generative AI Innovation Center, free credits for startups using major AI models and its Project Olympus model, comes as the corporate looks to catch as much as tech giant rivals within the blooming — and increasingly competitive — generative AI space. While Amazon claims that its various generative AI businesses have reached “multiple billions” in run rate, the corporate is widely perceived as having missed the boat on generative AI.

AWS originally planned to unveil its own generative AI model akin to OpenAI’s ChatGPT code-named Bedrock — which eventually became Amazon’s Bedrock model hosting service — at its annual conference in November 2022, in line with The Information. But major bugs forced the organization to postpone the launch. (Amazon PR disputes this.)

Amazon’s Alexa division has been beset with challenges as well, because of technical setbacks and political infighting, as reported by Fortune’s Sharon Goldman this week. Nine months after a splashy press demo of a “next-gen” Alexa, the brand new Alexa is reportedly removed from ready for prime time — the results of insufficient training data, inadequate access to training hardware and other roadblocks.

Amazon also passed on early opportunities to back two leading AI startups, Cohere and Anthropic. The corporate later tried to take a position in Cohere, but was rejected — and needed to accept a co-investment (albeit a large one, totaling $4 billion) in Anthropic with chief rival Google. 

Besides the recent departure of Howard Wright, AWS’ head of startups, who managed startup relationships on the org, a hurdle in Amazon’s way is growing scrutiny from regulators over Big Tech’s investments in AI startups.

The U.S. Federal Trade Commission recently opened an inquiry on Microsoft’s backing of OpenAI, in addition to Google and Amazon’s investments in Anthropic. European policymakers have signaled they’re skeptical of such deals as well.