The AI Economy: How AWS Is Fueling Startup Innovation

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Last December, I sat inside the theatre at the Venetian Hotel and Casino in Las Vegas, the home of world-famous magician Shin Lim. Only, I’m not there to see a sleight-of-hand spectacle—I’m there to watch the inaugural “Unicorn Tank,” a startup pitch competition put on by Amazon Web Services (AWS) held during its re:Invent conference.

For two hours, eight startups told their stories and shared their innovations in front of hundreds of attendees and a panel of five noted investors. These companies were part of AWS’ most recent global Generative AI Accelerator (GAIA) cohort and were vying for a $100,000 prize. While not predominantly AI-first, these startups showcased how they’re building next-generation businesses with gen AI.

The eight hailed “from every part of the globe and covered diverse fields, including hospitality, sustainability, content, gaming, audio, and even security,” Tiffany Bloomquist, AWS’ head of startups and general manager for Asia Pacific and Japan, explained. “Unicorn Tank” marked the spectacular grand finale of a ten-week program these startups just completed.

Disclosure: I attended Amazon's 2024 re:Invent as a guest of the company, which paid a portion of my travel expenses. That said, Amazon did not influence the contents of this post. These thoughts are entirely my own.

In a separate media briefing, she cited external research estimating that generative AI already contributes over $98 billion to the global GDP. To help grow that impact, AWS is backing startups it sees as “changing the course of technology.” “We are investing in these startups to ensure that they are achieving their full potential,” Bloomquist remarked. “We believe that they will be the enterprises and the largest software companies of the future, and it’s our job to help them on their journey.”

And while Silicon Valley remains a key hub for tech and AI innovation, she noted that new hotspots are gaining traction around the world, in cities like London, Paris, Berlin, Sydney, Seoul, Tokyo, and in parts of India, Brazil, and Mexico. “This is a global phenomenon, and we are investing globally to support startups from around the world,” Bloomquist said.

How AWS Is Shaping Gen AI Support for Startups

As AWS gears up for its GAIA’s third season, let’s dive deeper into why the company established this program to begin with. It shouldn’t be a surprise, as it has long championed startups—it’s one of the first to support entrepreneurs by issuing grants of cloud credits. Now, it’s doubling down on AI. In June 2024, AWS pledged $230 million (primarily in credits) to help AI startups accelerate development and deployment. Six months later, it followed up with a $1 billion commitment in cloud credits.

Naturally, these credit incentives will entice founders to build on AWS, creating opportunities to leverage the platform’s AI offerings, such as its Nova models and Bedrock. But what else does AWS gain by giving away cloud credits and not taking on a more financial stake in these startups?

“Our goal is [that] you never know where the next amazing startup will come from, and so we want to have as broad a net as we can cast. You never know what amazing partnerships will come from these conversations. We want to keep creating unique ways that startups can connect and get their message out,” Bloomquist told me on the sidelines of re:Invent.

Designing a Program That Scales Globally

She explained that AWS offers various programs to support early-stage companies, regardless of their level of growth. “There’s not one program because you need things that are done locally. You need things that are done at a geo level. You need things that are across time zones, and you need things that are done globally.” In addition to GAIA, AWS also operates similar accelerators across the four major geographic regions: North America, Asia Pacific and Japan (APJ), Europe, the Middle East and Africa (EMEA), and Latin America (LATAM).

The advantage of GAIA, Bloomquist pointed out, is the caliber of exposure and access compared to local and regional initiatives. While local accelerators can focus on fostering connections with nearby enterprises and ecosystems, GAIA is suited to elevate a startup’s visibility and expand networks across borders.

“At the global level, the level of exposure that you have means a lot,” she stated, citing the example of AI Hay, a Vietnamese AI answer engine startup from the ASEAN region. Bloomquist highlighted that through GAIA, the company not only received access to significantly more cloud credits than it would have through its local program, but also to potential investors and peer founders from around the world. AWS believes this type of global positioning could help startups advance partnerships and sharpen their value propositions on an international scale.

Why Visibility Matters at the Global Level

Bloomquist stated that her team received over 4,000 applications for GAIA’s second cohort, with 80 startups ultimately accepted, with an equal number coming from each region. “It was important for us when we ran this program at a worldwide level to ensure that there was a diversity of involvement from a variety of different startups from around the world,” she said.

With $230 million on the line, AWS had to design its selection process for startup applicants carefully. According to Bloomquist, a subset of the most promising applications made it to interviews and underwent both business and technical evaluations. Among the factors her team looked for: “Did the founder(s) have a compelling story and a unique situation that sparked them to create this business opportunity? How effective were they at actually talking about the unique product-market fit that they had and why they felt that would be successful? Was the technical solution one that we felt also, over time, would be able to scale and grow with a fit for purpose?” In other words, AWS wanted startups that it felt were best suited to maximize the benefits GAIA’s program provided.

Growing Momentum

Still, Bloomquist acknowledged the challenges of the selection process, such as having to turn away “fantastic businesses that are going to be highly successful” simply because the timing wasn’t right. Even so, AWS’ efforts have already yielded at least one notable outcome: Leonardo.ai, a generative AI content and research startup from the original 20-company cohort, was acquired by Canva last year. Building on that momentum, AWS is expanding the number of startups it supports through GAIA. It has quadrupled in size in its second year, and with its new $1 billion commitment, that figure could now grow significantly.

“We are now at a stage where virtually all startups will be applying generative AI to their business in one shape or form,” Jon Jones, AWS’ vice president and global head of startups, wrote in a statement. He adds that for GAIA’s third year, the program will focus on startups “developing the foundational technologies that will define what’s possible with AI.”

AWS doesn’t take any equity from any of the startups participating in its gen AI accelerators. The companies receive credits through AWS Activate, a program that provides the resources needed to build, launch, and scale on the cloud computing platform. No contract needs to be signed. Bloomquist reminded me that GAIA “isn’t about us getting a percentage of their business. It’s actually about us investing in them so they can experiment on the platform and really build and grow a business in those early stages that enable them to use our services to really light up the applications and the ideas that they want to build.”

Are Credits Better Than Money for Startups?

At its core, GAIA functions much like other startup accelerators, but with one key distinction. While the program invited founders to Seattle to collaborate with the AWS team and fellow cohort members, and provided mentorship and networking support, what it doesn’t do is offer cash investment or take any equity in return. In a way, AWS may view cloud credits as being more beneficial to startups at this point than an infusion of capital.

Bloomquist responded by saying AWS credits are an “incredibly useful lever for startups to be able to access our tools, see what models work for them, understand how they can build a more cost-effective solution than simply having maybe a couple of servers under their desk in the garage that they had as limitations for how they want to build.” She called it a “fundamental” program that is enabling a “democratization of access to technology to all startups that want to invest in this space.”’

For many early-stage startups, especially those building AI-driven products, access to infrastructure can be more valuable than receiving a cash infusion. Being granted cloud credits allows entrepreneurs to scale their compute-intensive operations quickly, experiment with models, and iterate efficiently without burning through their already limited runway. Moreover, unlike cash, these credits are directly tied to building and deploying the product, making them advantageous for startups seeking flexibility and technical depth when starting.

Now Accepting Applications

Startups interested in participating in AWS’ third GAIA cohort can apply now through July 10. Selected companies will be announced in late September. However, unlike past years, it appears the program will be more abbreviated—the cohort size has been cut in half to 40 startups and will run for eight weeks, down from the ten weeks last year.

As Jones stated, for 2025, AWS is looking for companies that are “developing generative AI technologies, including building models, infrastructure, fine-tuning tools, and agentic workflows.” Startups will receive up to $1 million in AWS credits, technical guidance, mentorship, go-to-market support, and access to AWS’ generative AI technology.

This year’s GAIA will start with an in-person launch at Amazon’s headquarters in Seattle and conclude once again at AWS re:Invent in December.

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