Public cloud providers are engaged in fierce competition to partner with the leading AI companies as cloud customers or acquisition targets. Microsoft kicked off this race in 2019 when they invested $1 billion in OpenAI to help cover high cloud computing costs. Both companies now sell access to OpenAI’s technology, whether it’s ChatGPT, BingChat, or GitHub Co-Pilot. Microsoft sells the technology as part of Azure’s services, and OpenAI sells it directly. On the other hand, OpenAI has also collaborated with other companies, such as Salesforce, who are themselves challenging Microsoft's OpenAI applications. The partnership dynamics have reportedly created confusion and issues within Microsoft’s GTM.
Meanwhile, rivals of Microsoft have been looking to attract more AI customers and investments. Amazon, for example, has developed a ten-week program to support generative AI startups worldwide. Participants will receive AI models and tools, machine learning stack optimization, and customized go-to-market advice. Amazon is also introducing access to its own language model (Titan) as well as language models from startups AI21, Anthropic (backed by Google), and Stability AI (for transforming text into images). Google has also been investing in AI startups by providing cash and Google Cloud credits in exchange for an equity stake. For example, it has invested in Anthropic, a direct challenger to OpenAI. It has also made an investment in Runway, an AI-powered video creation and editing startup. Runway has announced a multi-year partnership with AWS as its preferred cloud provider.
As the biggest public cloud providers race to secure their positions over AI ecosystems, the enterprise giants are also getting into the game of startup investments. Nvidia, along with Oracle and Salesforce, have invested in Cohere, a generative AI startup founded by ex-Google Brain engineers specializing in large language models for enterprises. The chip giant has made 18 investments in startups since the start of 2021, including in Adept AI. Salesforce Ventures, the investment arm of Salesforce, has doubled its Generative AI Fund, expanding it from $250 million to $500 million to support the AI ecosystem. It has also recently announced investments in Anthropic and Cohere.
The race is heating up as large corporates align with AI startups to compete for the cutting edge. For more coverage of the AI ecosystem, check out our memos on Cohere, OpenAI, Jasper, DeepL, Hugging Face, Descript, and AssemblyAI.
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