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Here's Why Some AI Startups Are Switching to Google Cloud from AWS (AMZN)

Here's Why Some AI Startups Are Switching to Google Cloud from AWS (AMZN)

Business Insider6 hours ago
Alphabet's (GOOGL) Google Cloud is quickly becoming a serious competitor to Amazon's (AMZN) AWS in the race to support AI startups. One example, according to The Information, is The Browser Company, which was developing a new browser called Dia with advanced AI features. At first, the team considered using AWS, since it already powered other parts of Dia. However, after testing both options, The Browser Company found that Dia's AI tools ran faster and cost less on Google Cloud due to Google's in-house Gemini model. Despite generous financial incentives from AWS, the startup chose Google.
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While AWS still makes more than double the revenue of Google Cloud and has long been the go-to provider for startups, Google has closed the gap by offering faster models, better developer tools, and easier account setups. Startups like Nectar Social and Pear Health Labs now rely on Google Cloud for tasks that require advanced reasoning, thanks to Gemini 2.5 Pro. Google has also gone a step further by connecting startups directly with DeepMind researchers. Interestingly, even OpenAI, which usually relies on Microsoft's (MSFT) Azure, has started using Google Cloud services.
Nevertheless, AWS still has other major benefits, especially for startups that need a lot of computing power or custom infrastructure. Some companies, like Haize Labs and Leash Bio, switched from Google to AWS because it gave them better access to Nvidia (NVDA) chips, faster setup for custom APIs, and more flexibility with scaling. In fact, Haize Labs needed to quickly increase its computing capacity to meet demand from a large customer, and AWS delivered within weeks. Although Google is winning over startups with its strong AI models and simplified user experience, AWS remains the top choice for companies that need raw computing power and fast scaling.
Which Cloud Stock Is the Better Buy?
Turning to Wall Street, , although they are virtually tied. In fact, GOOGL's price target of $202.24 per share implies 11.4% upside versus AMZN's 11.3%.
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