Lambda Raises $1.5B in Series E to Build AI Data Centers After Major Microsoft Deal

AI data center provider Lambda raises whopping $1.5B after multibillion-dollar Microsoft deal | TechCrunch

AI data center provider Lambda announced Tuesday it raised $1.5 billion in a round led by TWG Global, a relatively new $40 billion investment firm formed by billionaires Thomas Tull, the former owner of Legendary Entertainment, and Guggenheim Partners founder and CEO Mark Walter. TWG holds a variety of the billionaires' assets, including Walter's stakes in the Los Angeles Lakers and the new Cadillac F1 racing team. The firm also has a $15 billion fund to invest in AI anchored by Abu Dhabi's Mubadala Capital. TWG previously invested in a partnership with Elon Musk's xAI and Palantir to sell AI agents to enterprises. Now it's backing Lambda, which operates a number of U.S. AI data centers. Lambda is a CoreWeave competitor, although it also sells its so-called "AI factories" to hyperscaler clouds. Earlier this month, Lambda announced a multi-billion dollar deal to supply Microsoft with AI infrastructure using tens of thousands of Nvidia GPUs. (Nvidia is an investor in Lambda as well.) Remember that Microsoft had a similar deal with CoreWeave and had bought about $1 billion worth of services from CoreWeave in 2024, it's largest customer last year by a mile. Then OpenAI swooped in and signed a $12 billion deal with CoreWeave in March. Meanwhile, deal watchers have been talking for months about Lambda looking to raise hundreds of millions of dollars at a valuation north of $4 billion. There was also talk of an IPO. Prior to this, Lambda raised a $480 million Series D in February, with an estimated valuation of $2.5 billion, according to Pitchbook. Lambda's $1.5 billion raise far outstrips those earlier whispers of what it was seeking. Whether its valuation also soared, we can't confirm and Lambda declined to comment on that.

AI cloud operator Lambda raises $1.5B+ to build data centers - SiliconANGLE

Artificial intelligence infrastructure startup Lambda Inc. today announced that it has closed a funding round worth more than $1.5 billion. TWG Global, a holding company led by billionaire investors Thomas Tull and Mark Walter, led the Series E transaction. It was joined by Tull's US Innovative Technology Fund. The latter firm previously led a $320 million funding round for Lambda last year. Founded in 2012, Lambda operates a cloud platform optimized for AI workloads. The platform provides access to AI environments called Superclusters that can be provisioned with upwards of 165,000 graphics cards. According to Lambda, customers have control over the firewall that regulates access to their Superclusters and the associated encryption keys. The company also provides other infrastructure options. Lambda customers with limited computing requirements can lease individual instances that each include up to eight graphics processing units. Last year, the company introduced AI clusters called 1-Click Clusters that include up to 2,000 GPUs and can be leased for a few days. Lambda provides managed versions of Kubernetes and Slurm to help customers manage the infrastructure they provision in its cloud. Kubernetes is best suited for inference workloads, while Slurm lends itself to powering long-running training workflows. Lambda's managed implementations automate some of the manual work involved in managing the two frameworks. The company also invests in AI research. It has developed a type of AI model called a latent thought model, or LTM, that creates an abstract representation of the data it processes. According to Lambda, that feature enables LTMs to perform tasks such as arithmetic calculations better than several competing architectures. According to the Wall Street Journal, the company will use its newly raised capital to build data centers. Lambda will reportedly hire supply chain specialists, engineers and other technical professionals to expedite the effort. The company previewed one of its upcoming facilities late last month. Lambda plans to turn a building in Kansas City, Missouri into an AI data center with 24 megawatts of initial computing capacity. The facility is expected to contain 10,000 of Nvidia Corp.'s top-end Blackwell Ultra graphics cards when it will open early next year. "This round of funding helps enable Lambda to develop gigawatt-scale AI factories that power services used by hundreds of millions of people every day," said Lambda co-founder and Chief Executive Officer Stephen Balaban. It's possible some of the data center capacity Lambda is building will be made available to Microsoft Corp. under a cloud contract the companies signed this month. The agreement, which is worth several billion dollars, will see Lambda host tens of thousands of GPUs for the tech giant.