AI Data Center Provider Lambda Raises Massive $1.5B After Multibillion-Dollar Microsoft Deal

AI infrastructure company Lambda has secured a staggering $1.5 billion in fresh funding, the company announced on Tuesday. The round was led by TWG Global, a relatively new $40 billion investment firm created by billionaires Thomas Tull — the former owner of Legendary Entertainment — and Mark Walter, the founder and CEO of Guggenheim Partners.

TWG Global manages a diverse portfolio, including Walter’s ownership stakes in the Los Angeles Lakers and the Cadillac F1 racing team. The firm also oversees a $15 billion AI-focused investment fund, backed by Abu Dhabi’s Mubadala Capital. In recent months, TWG has also invested in partnerships with Elon Musk’s xAI and Palantir, aimed at selling AI agents to enterprise customers.

Now, TWG is throwing its weight behind Lambda, an AI data centre operator that runs multiple GPU-powered facilities across the United States. A direct competitor to CoreWeave, Lambda not only provides on-demand AI compute but also sells its “AI factory” infrastructure to major cloud hyperscalers.

Earlier this month, Lambda revealed a multibillion-dollar agreement with Microsoft, under which it will supply the tech giant with AI compute powered by tens of thousands of Nvidia GPUs. Nvidia is also one of Lambda’s existing investors.

Microsoft’s appetite for GPU compute continues to grow. In 2024, the company purchased nearly $1 billion worth of services from CoreWeave, making it CoreWeave’s largest customer by a significant margin. But earlier this year, OpenAI signed its own $12 billion deal with CoreWeave, adding another layer of competition to the booming AI compute market.

Industry insiders have been discussing Lambda’s fundraising ambitions for months, noting that the company was exploring a raise in the hundreds of millions at a valuation above $4 billion, alongside whispers of a potential IPO. Lambda’s last major round — a $480 million Series D in February — placed its valuation near $2.5 billion, according to PitchBook.

Now, with a final raise of $1.5 billion, Lambda has exceeded early expectations by a wide margin. Whether the company’s valuation also skyrocketed remains unconfirmed — Lambda declined to comment on the matter.