TheChek News Flow

The Takeaway

• Senior AWS leaders have referred to the Bedrock capacity problem as a “disaster”

• Frustrated customers have chosen to buy Anthropic models directly from the startup

• Google could benefit from that shift by AWS customers

Amazon has hitched its artificial intelligence wagon to Anthropic, investing $8 billion in the startup and heavily promoting its AI to customers of the Amazon Web Services cloud unit.

But AWS has fumbled Bedrock, a key service its customers use to build applications with Anthropic AI models. Customers who have used Bedrock say its application programming interface puts arbitrary limits on how much they can use Anthropic’s models and lacks features they want, according to founders and executives from four AWS customers, as well as two consulting firms whose clients use AWS.

AWS representatives say such usage limits are common in the industry. However, the problem suggests AWS doesn’t have enough server capacity for Anthropic usage or is reserving an outsize amount of it for certain large customers.

Inside AWS, some senior leaders recently discussed the Bedrock capacity problem as a “disaster,” according to a person who was part of the conversation.

If the issues persist, AWS risks losing its standing with startups that might later become large consumers of cloud applications, said one of the consulting firm executives.

Google, a major AWS rival that has also invested in Anthropic, stands to benefit from Bedrock’s problems.

Several customers said that because of the Bedrock issues, they now go to Anthropic’s website to get access to models through the startup’s own API.

Anthropic has used Google’s servers in addition to those of AWS to power its API business, according to an AWS executive. Anthropic’s ability to tap two cloud providers may explain the capacity gap between Bedrock, which can only access Amazon’s servers, and Anthropic’s API. It also means Google could be capturing revenue that might otherwise have gone to AWS.

AWS spokesperson Kate Vorys said in a statement via email that AWS has “tens of thousands of customers” using Anthropic models through Bedrock and the service is experiencing “unprecedented demand” as more customers add generative AI to the cloud applications they use to run their businesses.

AWS uses rate limits in Bedrock to ensure that all of its customers can get “fair access” to popular AI models, and in services like EC2, its cloud server business, “to protect the security and continuity of our technology,” said Vorys.

“The Information’s suggestion that rate limits are a response to capacity constraints, or that Amazon Bedrock is not equipped to support customers’ needs, is false,” Vorys said in the statement.

Lovable Loves Anthropic

AWS leaders recently discussed concerns that Lovable, a fast-growing startup that helps nonengineers use AI to write code for applications, would defect from Bedrock because AWS was unable to handle the startup’s usage of Anthropic models, according to a person involved in the conversations.

Anton Osika, CEO of Lovable, confirmed in an interview that his company is using Anthropic’s API.

“I know that we want to get the best possible terms and we need the most recent features, and the most recent features come to Anthropic first,” Osika said without elaborating.

He declined to comment on the record about whether Lovable is still using Bedrock. A person who works at AWS said Lovable is still an active and growing customer.

One alternative to Bedrock is Vertex, a similar service from Google Cloud that also hosts Anthropic models. More than 4,000 customers use Anthropic’s models through Vertex, up from around 2,000 last summer, a Google Cloud spokesperson said.

Errors Rising

The Bedrock capacity shortage has existed since AWS launched the service a year and a half ago. But the frequency and severity of error messages customers encounter while using it have increased in the past few months, according to the customers, who include the founders of AI coding and education startups.

In one instance of Bedrock’s capacity limits this month, AWS told a customer they would be able to tap Anthropic’s Claude Sonnet 3.7 model just five times per minute, according to a consulting firm that works with the customer. For the same price as Bedrock, the lowest-price usage tier of Anthropic’s own API gives customers up to 50 requests per minute. (AWS customers can sometimes get access to higher request limits by asking their AWS support teams, said a person who works at AWS and an executive from one of the consulting firms.)

Michael Gerstenhaber, vice president of product at Anthropic, said AWS and Google are investing in more servers for Anthropic and whatever problems exist with Bedrock could be temporary.

AWS also uses Bedrock to distribute its own AI model series, Amazon Nova, which it first unveiled in December and which doesn’t seem to be experiencing the same capacity problems as the Bedrock Anthropic models.

To be sure, Amazon remains the undisputed king of cloud computing, and even some AWS customers said that despite the Bedrock problems, they don’t plan to shift all of their spending to Anthropic’s API. That’s because they have more trust in the ability of AWS to handle their customers’ data securely than they do in that of Anthropic, which was founded relatively recently.

As of last fall, AWS’ AI business, which includes Bedrock, was on pace to generate more than $2 billion a year and “continues to grow at a triple-digit year-over-year percentage,” Amazon CEO Andy Jassy said on an earnings call in October. (AWS generated $107.6 billion in revenue in 2024.)

Amazon isn’t the only major cloud provider that has struggled to attract or serve some customers of APIs for AI. As of last year, more customers were using OpenAI’s API than Microsoft’s Azure cloud API to access the OpenAI models, in part because customers said OpenAI helped them tailor the AI to their needs better than Microsoft could.

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And Google last year struggled to attract customers to its Gemini AI models because developers found them too difficult to use compared to rivals’ technology.

But AWS leaders seem to be aware of what’s at stake.

In a recent management reorganization, AWS moved Bedrock under David Brown, chief of its EC2 cloud server business, which has long been the cloud provider’s largest revenue generator. Brown joined Amazon in 2007 and has deep experience in addressing the capacity needs of AWS’ largest customers.

Some AWS customers have been able to work around the Bedrock API access limits by creating multiple accounts, each of which has its own capacity allotment, and developing apps to draw from the aggregated capacity of those accounts, said the two people who do business with AWS.

Currently, Amazon advises customers that need more capacity to use a service called Provisioned Throughput, which lets customers pay extra to guarantee a certain level of computing resources. Designed for large-scale applications with thousands of simultaneous users, the service bills customers by the hour rather than based on the amount of processing an AI model handles for the app, known as a per-token basis.

Customers find it hard to forecast how much time they will need to use Provisioned Throughput and have an easier time with token-based billing, said executives from two consulting firms that work with AWS customers. (Microsoft and Google sell similar services that charge customers per token.)

Amazon has also been slow to add certain features to the Bedrock version of Anthropic that Anthropic launched to its own API customers. In December, Anthropic launched prompt caching, which ensures developers don’t have to provide AI models with the same background information over and over again. Amazon didn’t make the same feature available in Bedrock until earlier this month.

“Anthropic’s API has improved substantially over the past year or so,” said Travis Rehl, chief technology officer and chief product officer at Innovative Solutions, which works with AWS and Anthropic customers.

The absence of prompt caching in Bedrock’s Anthropic models led Praxis AI, a six-year-old startup that develops virtual teaching assistants for college professors, to start using Anthropic’s own API, said David James Clarke IV, president and CEO of Praxis.

Clarke said he is still wedded to using AWS overall, and “there’s so much other technology in the AWS stack that I’m not even close to jumping ship.…But I just would like to see maybe a little bit more” from AWS in launching new features.

Not every Bedrock customer has experienced capacity problems. Cybersecurity software provider Druva, which uses Bedrock to tap AI from Anthropic and other providers for a chatbot that helps companies figure out what to do after facing ransomware attacks, said it hasn’t experienced any throttling.