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AWS commits $230 million to support generative AI startups

EditorAhmed Abdulazez Abdulkadir
Published 06/13/2024, 11:10 PM
© Reuters.

SEATTLE - Amazon Web Services (AWS), a subsidiary of Amazon.com, Inc. (NASDAQ: AMZN), has announced a substantial investment of $230 million to foster the development of generative artificial intelligence (AI) applications by startups worldwide. This initiative is designed to assist early-stage companies by providing AWS credits, mentorship, and educational resources to enhance their AI and machine learning (ML) capabilities.

The investment will fund the second cohort of the AWS Generative AI Accelerator, a program that offers up to $1 million in credits to each selected startup. The program targets early-stage startups utilizing generative AI to tackle complex challenges. Applications for the accelerator opened today and will be accepted until July 19.

AWS has a history of supporting startups, with Matt Wood, vice president of Artificial Intelligence Products at AWS, noting that 96% of AI/ML unicorns currently operate on AWS. The program aims to help startups launch and scale businesses, impacting various sectors including financial services, healthcare, media, and climate change.

The AWS Generative AI Accelerator provides access to technical and business mentorship, industry expertise, and AWS's computing infrastructure. This includes AWS Trainium and AWS Inferentia, energy-efficient AI chips, and Amazon SageMaker for building and training ML models. NVIDIA (NASDAQ:NVDA), a key partner in the program, will offer technical sessions and invite startups to join the NVIDIA Inception program.

Startups selected for the second cohort will be announced on September 10, with the program commencing on October 1 at Amazon's Seattle campus. The 10-week program will culminate in December at re:Invent 2024 in Las Vegas, where the 80 participating startups will present their solutions.

Success stories from the program's first cohort, such as Leonardo.AI and Vevo Therapeutics, highlight the benefits of AWS's infrastructure in reducing costs and accelerating development in fields like content creation and drug discovery.

In other recent news, Amazon.com Inc (NASDAQ:AMZN) has been the subject of significant developments. The company has faced a reversal in a U.S. appeals court decision, which previously protected employees supporting unionization efforts from termination. This ruling negates an order put in place last year following a request from the National Labor Relations Board.

In parallel, Amazon's stock has maintained its 'Buy' rating by BofA Securities, amidst the company's major logistics expansion. The e-commerce giant is expected to add approximately 86 million square feet of logistics space in 2024, including the development of inbound cross dock centers and consolidation centers.

Furthermore, Amazon's AI dominance is under scrutiny by the U.S. Department of Justice and the Federal Trade Commission, as they examine competitive dynamics within the AI industry. The regulators are focusing on the business practices of major players, including Amazon.

Lastly, Amazon saw a significant investment from Cathie Wood's ARK ETF, with the purchase of 53,368 shares valued at approximately $9.67 million. This move appears to reinforce ARK's bet on the e-commerce giant, indicating confidence in the company's trajectory.

InvestingPro Insights

Amazon.com, Inc. (NASDAQ: AMZN) continues to demonstrate its commitment to innovation and support for startups with the latest investment in generative AI applications. As the company gears up to empower the next wave of AI unicorns through the AWS Generative AI Accelerator, let's delve into some key financial metrics and insights provided by InvestingPro that could be of interest to investors and industry watchers.

InvestingPro Data highlights a robust financial profile for Amazon, with a significant market capitalization of $1.94 trillion USD, reflecting its industry dominance. The company's revenue for the last twelve months as of Q1 2024 stands at a staggering $590.74 billion USD, marking a growth of 12.54%. This underlines Amazon's continued expansion and its ability to generate substantial sales. Moreover, Amazon's gross profit margin during the same period is 47.59%, showcasing the company's efficiency in maintaining profitability despite the costs incurred.

An InvestingPro Tip that aligns with the article's focus on Amazon's investment in AI startups is the company's low price volatility. This stability may be attractive to startups looking for a reliable partner in a dynamic and sometimes unpredictable tech landscape. Additionally, Amazon's position as a prominent player in the Broadline Retail industry can provide a valuable network and industry insights to startups participating in the AWS Generative AI Accelerator.

For those interested in further insights and tips, InvestingPro offers additional information on Amazon's financial health and market performance. With a total of 14 InvestingPro Tips available, investors can gain a deeper understanding of Amazon's strategic position and market outlook. To access these insights and more, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.

By capitalizing on Amazon's extensive resources and industry expertise, startups in the AWS Generative AI Accelerator are well-positioned to make significant strides in the development of AI and ML technologies, potentially revolutionizing various sectors and contributing to the broader technological landscape.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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