AWS’s revenue increased by 17% to $9.42bn in the first quarter of 2024 | Credit: Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images

Amazon has announced it will be investing $230m in the form of Amazon Web Services (AWS) credits awarded to AI startups, as the tech giant looks to gain early-stage GenAI clients in its cloud business.

The credits will give the GenAI companies access to infrastructure, computing power and AI models if they agree to build their business on AWS. 

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Amazon’s new commitment is focusing wholly on GenAI, the tech giant claims it already spends over $1bn on providing startups with cloud credits annually. 

Matt Wood, vice president of AI Products at AWS, said that companies will be able to “iterate very quickly and pivot very quickly as necessary.”

“Then ultimately, when they hit on that home run, they’ll be able to double down and get to the scale with security, responsibility and consistency,” Wood added.

The announcement marks the latest in a trend of cloud providers giving away free credits to attract companies to their services.

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As the demand for cloud grows alongside the rise of AI, cloud providers have been battling for their share of GenAI clients. 

AWS’s revenue increased by 17% to $9.42bn in the first quarter of 2024, fuelled by the rise of AI demand. 

In May, AWS invested $8.5bn into its European Sovereign Cloud in Germany. The European Sovereign Cloud is intended to be an independent cloud service for Europe’s public sector that complies with the EU’s data protection laws. 

It will first launch its AWS services in Brandenburg state by 2025. 

The US saw a decrease in the value of cloud deals in 2023, following an industry investment peak in 2021.

According to GlobalData's deal database, the value of deals in 2023 totalled $19.1bn. This marked a significant decrease from 2021 when deals totalled $54bn.

According to GlobalData forecasts, the total cloud computing market will be worth $1.4trn by 2027, having grown at a compound annual growth rate of 17.1% from $638.6bn in 2022.