AI giants give away millions in compute to lock in startups

OpenAI, Anthropic, and cloud providers like Google and Microsoft are in a bidding war, offering startups free compute and token credits worth millions. Some young companies get offers totaling over $3 million — roughly the size of an average US seed round. The goal is to hook them early and make switching too painful. Providers like Google offer up to $500k in credits plus access to DeepMind engineers. Y Combinator startups are prime targets: Sam Altman dangled $2 million in credits for equity, while Anthropic and OpenAI countered with $500k and no equity demands. This discount war heats up as OpenAI and Anthropic need better margins before their IPOs, and competition from cheaper open models grows. Why it matters: These giveaways show how AI giants are trading short-term profit for long-term dominance, betting that early ecosystem lock-in will pay off once startups scale — but it also risks distorting market signals and inflating startup reliance on freebies.