I have no idea why people are saying this is common. There are plenty of cloud credits programs for startups from GCP, etc, but they are not funded by VCs, they are sales & marketing programs funded by the cloud vendors.

A small minority of VCs (AI Grant, a16z, and now YC) have been using their funds to help startups get access to GPUs specifically for the last year and a bit, but there's no need to do a similar thing for general cloud services where there is no shortage.

> how common is it for venture funds to buy bulk cloud services for use in startups they own/invest in?

Outside of this article, I've never heard of it. In fact it seems kind of illogical because VCs don't necessarily know which infra tech to invest in. (Not their job.)

What VCs will do is connect you with public cloud vendor programs for startups or get you access to favorable discounts that are not generally available for small companies. My company benefited from both of these.

Edit: clarity

It's not common, but not unheard of. Nat Friedman and Daniel Gross own a cluster of GPUs that they rent back to their startups for below market rates. They essentially trade GPU time for equity.

Index Ventures has a deal with Oracle to provide GPUs at no cost to their startups (they pay the bill).

Very common. All the major CSPs have dedicated Startup and VC GTM teams for this reason.

For example, Thoma Bravo's VC fund would give a 10-20% discount on a certain major CSP's compute because of the parent fund's significant stake in that company.

Extremely common, to the point that all major cloud vendors have special VC programs.

A16z seems to have bought 20K GPUs to be used by the startups they fund. https://www.theinformation.com/articles/andreessen-horowitz-... (July 9)

Sorry for the direct link, couldn’t get archive.is to work with this one.

i think A16z has a similar model but I believe they own the servers themselves

very common. we had many thousands of dollars in cloud provider credits through our investors