Amazon internal documents show companies may be reducing cloud budget to spend more on…; company denies trend

Amazon Web Services has identified a “fundamental” shift in startup spending patterns. According to internal documents obtained by Business Insider (BI), cloud service providers say companies are delaying cloud adoption to allocate more resources to artificial intelligence (AI) technologies. Startups are redirecting funds from traditional AWS cloud services toward AI models, inference capabilities, and AI developer tools. The documents indicate these companies are distributing costs across newer AI technologies that offer greater flexibility for switching between providers. The trend marks a change from previous years, when AWS frequently represented the first and largest expense in startup budgets. However, an AWS spokesperson said the report was using “old data to reach outdated conclusions.” The spokesperson added that startups continue to build on AWS, including AI companies such as Perplexity and Luma AI, which “recently chose” AWS.