Amazon has announced a substantial commitment to the burgeoning field of generative AI, pledging up to $230 million to support startups developing applications powered by this cutting-edge technology. This investment, with approximately $80 million allocated specifically to fund Amazon’s second AWS Generative AI Accelerator program, aims to position AWS as the go-to cloud infrastructure provider for these innovative startups. However, this funding comes with a caveat: much of it, including the entire portion of the accelerator program, is in the form of compute credits for AWS infrastructure. This means the funds cannot be transferred to other cloud service providers like Google Cloud or Microsoft Azure.

To enhance the appeal of this initiative, Amazon has announced that startups participating in this year’s Generative AI Accelerator cohort will gain access to expertise and technology from Nvidia, the program’s presenting partner. These startups will also be invited to join the Nvidia Inception program, which offers opportunities to connect with potential investors and access additional consulting resources.

The scale of the Generative AI Accelerator program has significantly increased compared to the previous year. Last year, the cohort consisted of 21 startups that received up to $300,000 each in AWS compute credits, totaling around $6.3 million in investment. This year’s program is expected to provide even more substantial support, reflecting Amazon’s commitment to fostering innovation in the AI space.

Matt Wood, VP of AI Products at AWS, emphasized Amazon’s dedication to helping startups succeed in the rapidly evolving AI landscape. “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,” Wood said in a statement.

Amazon’s growing investment in generative AI technology includes initiatives like the $100 million AWS Generative AI Innovation Center and free credits for startups using major AI models. Additionally, Amazon has developed Project Olympus, further cementing its position in the competitive generative AI market. Despite claiming that its various generative AI businesses have reached “multiple billions” in run rate, Amazon is still perceived by some as having lagged behind its tech giant rivals in this space.

The journey has not been without its setbacks. AWS originally planned to unveil its own generative AI model, code-named Bedrock, similar to OpenAI’s ChatGPT, at its annual conference in November 2022. However, major bugs forced the organization to postpone the launch, leading to the eventual introduction of Amazon’s Bedrock model hosting service. Amazon PR disputes this account, but the delay underscores the challenges the company has faced in keeping pace with competitors.

The Alexa division has also encountered difficulties, including technical setbacks and internal conflicts. Nine months after a high-profile press demo of a “next-gen” Alexa, the product remains far from market-ready, hampered by insufficient training data and inadequate access to training hardware.

Amazon’s investment strategy has also seen some missed opportunities. The company passed on early chances to back leading AI startups Cohere and Anthropic. While Amazon later attempted to invest in Cohere, it was rebuffed and had to settle for a significant co-investment with chief rival Google in Anthropic, totaling $4 billion.

Adding to these challenges is the departure of Howard Wright, AWS’ head of startups, who managed relationships with startup organizations. Furthermore, Amazon faces growing scrutiny from regulators over Big Tech’s investments in AI startups. The U.S. Federal Trade Commission has recently opened an inquiry into Microsoft’s backing of OpenAI, as well as Google and Amazon’s investments in Anthropic. European policymakers have also expressed skepticism about such deals.

Despite these hurdles, Amazon’s substantial commitment to generative AI underscores its determination to be a major player in this transformative field. By supporting startups and fostering innovation, Amazon aims to secure its position at the forefront of the AI revolution, even as it navigates regulatory scrutiny and intense competition.

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