Nvidia and Alphabet's CapitalG in Talks to Fund Vast Data at $30 Billion Valuation

Alphabet's CapitalG and Nvidia are in talks to invest in AI infrastructure provider Vast Data at a valuation of up to $30 billion. The startup, which develops storage technology for large AI data centers, has raised $380 million to date and is expected to close its new funding round in the next few weeks. Vast Data has a strong backlog of orders and projects to grow its annual recurring revenue to $600 million next year.

In a significant development for the Israeli tech industry, AI infrastructure company Vast Data is reportedly in talks to secure a substantial funding round led by Alphabet's CapitalG and Nvidia. The potential investment could value the company at up to $30 billion, according to sources cited by Reuters [1]. This funding round, if completed, would not only be the largest in Israeli tech history but also mark a significant milestone for AI infrastructure startups globally.

Vast Data, founded in 2016 by Israeli entrepreneurs Renen Hallak and Shachar Fienblit, has carved a niche for itself in the AI infrastructure space. The company, based in New York with R&D centers in Tel Aviv and Haifa, has maintained a low profile despite its impressive financial performance. As of early 2025, Vast Data had crossed $200 million in annual recurring revenue (ARR), with projections to triple that figure within a year [1]. The company’s ability to scale without burning cash has allowed it to be selective about funding and acquisition offers.

Vast Data's technology is particularly prized for enabling real-time access to unstructured data, emails, logs, PDFs, and multimedia, that AI systems must process efficiently. By applying proprietary software to flash memory, the company has made large-scale storage faster and more cost-effective, addressing a critical bottleneck for enterprises and cloud providers [1]. The company's customer base includes major names such as the U.S. Air Force, the Department of Energy, Booking Holdings, Zoom, Pixar, Boston Children’s Hospital, and Elon Musk’s AI startup xAI. Nvidia itself, a prior investor and customer, has been a vocal champion of Vast Data’s technology.

The new funding round is significant for several reasons. It could cement Vast Data's position as Israel’s highest-valued private tech company and mark a global milestone for AI infrastructure startups. The deal also underscores the growing trend in venture capital and corporate investment towards the "plumbing" of the AI economy, rather than flashy consumer applications [1]. Additionally, it reflects the strategic partnership between Vast Data and CoreWeave, the AI cloud provider that recently went public and soared to a $77 billion valuation before falling back to around $50 million [1].

Nvidia's involvement in this deal is notable, given its dominant position in the AI boom. The chip giant has inked a $2.36 billion deal to supply advanced GPUs to a consortium of data center operators in Asia, highlighting its strategic positioning in the AI infrastructure market [2]. This deal underscores Nvidia's ability to navigate geopolitical nuances and capitalize on the growing demand for AI infrastructure. The company’s recent financial windfall, with first-quarter revenue hitting $44.1 billion, a 69% year-over-year surge, further emphasizes its robust financial health [2].

The potential $30 billion valuation for Vast Data, if the funding round closes as expected, would position the company in a class of its own in Israeli tech. The deal may also serve as a last chance for strategic investors like Nvidia to deepen ties or for late-stage investors to get in before valuations soar further [1]. As Vast Data continues to grow, its strong backlog of orders and projects positions it well to achieve its goal of $600 million in ARR next year.

References:
[1] https://www.calcalistech.com/ctechnews/article/b8kyeze8s
[2] https://www.webpronews.com/nvidia-secures-2-36b-gpu-deal-for-asian-ai-data-centers-amid-surge/