AI Cloud Startup Lambda Raises $480 Million; Nvidia Among Investors

Lambda, a leading AI cloud startup, has raised $480 million in a new funding round, with Nvidia being one of the key investors. This latest round of funding comes as the AI cloud market continues to grow, driven by increasing demand for scalable and flexible infrastructure, access to the latest hardware and software, and the need for secure and compliant cloud services.



Lambda's latest funding round, led by Andra Capital and SGW, the family office of early Google investor Scott Hassan, brings its total equity raised to $863 million. The company did not disclose its valuation, but sources said this round gave the firm a post-money valuation of $2.5 billion. ARK Invest, G Squared, and servers provider Super Micro also participated in the round.

Lambda offers cloud services and software designed for training, fine-tuning, and deploying AI models. A major part of the business is renting out servers powered by Nvidia's artificial intelligence GPUs, which has benefited from the spiking demand for such hardware in the AI boom. The company also offers software and hosted access to enterprises to run and deploy different AI models, including open source ones.

Lambda CEO and co-founder Stephen Balaban said the company has seen much growth in the deployment of open source models, including China's DeepSeek. "Lambda is really well positioned as a company to take advantage of open source AI models like DeepSeek-R1 because we have well over 25,000 GPUs on our cloud platform that can be readily repurposed to host these open source models," he said in an interview.

The launch of DeepSeek-R1 last month significantly accelerated demand for Nvidia H200 chips from its clients, according to Balaban. Enterprises are pre-purchasing large blocks of Lambda's H200 capacity even before public availability. He added the new investment would be used to purchase more Nvidia chips for its cloud platform, as well as expansion of its software products including Model Inference API, and its Chat AI Assistant.

Lambda's mission is to build the #1 AI compute platform in the world. To accomplish this, the company will need lots of NVIDIA GPUs, ultra-fast networking, lots of data center space, and lots of great new software to delight you and your AI engineering team. With this new financing, Lambda will accelerate the growth of its GPU cloud, ensuring AI engineering teams have access to thousands of NVIDIA GPUs with high-speed NVIDIA Quantum-2 InfiniBand networking.

Lambda's expansion of its GPU cloud and software products, including Model Inference API and Chat AI Assistant, contributes to its growth and market penetration by providing scalability and accessibility, diversified offerings, open source model support, and attracting new customers. These factors enable Lambda to grow its customer base, increase market share, and solidify its position as a leading AI compute platform provider.



In conclusion, Lambda's latest funding round, with Nvidia as one of the key investors, positions the company as a strong competitor in the AI cloud market. The substantial funding allows Lambda to invest in infrastructure, software development, and marketing, enabling it to compete with larger players like Amazon Web Services (AWS) and Microsoft Azure. With a focus on scalability, accessibility, diversified offerings, open source model support, and attracting new customers, Lambda is well-positioned to continue its growth and market penetration in the rapidly evolving AI landscape.