AI data center provider Lambda raises whopping $1.5B after multi-billion Microsoft deal

Lambda, an AI data center provider, made headlines on Tuesday by securing a substantial $1.5 billion in funding, primarily led by TWG Global. This investment firm, which boasts a staggering $40 billion in assets, was co-founded by notable billionaires Thomas Tull, former owner of Legendary Entertainment, and Mark Walter, the CEO and founder of Guggenheim Partners. TWG Global's portfolio includes various high-profile investments, such as Walter's shares in the Los Angeles Lakers and involvement in the new Cadillac F1 racing team. Additionally, the firm has set up a $15 billion fund dedicated to advancing AI technologies, supported by Abu Dhabi’s Mubadala Capital. In the past, TWG has partnered with the likes of Elon Musk’s xAI and Palantir to develop AI solutions for businesses. Now, it has turned its attention to Lambda, which operates several AI data centers across the U.S., positioning itself as a competitor to CoreWeave. Notably, Lambda also supplies its AI infrastructure—referred to as “AI factories”—to major cloud service providers. Earlier this month, Lambda announced a landmark multi-billion dollar agreement with Microsoft to deliver AI infrastructure, utilizing tens of thousands of Nvidia GPUs, which is also an investor in Lambda. This deal comes on the heels of Microsoft’s previous partnership with CoreWeave, where it had invested about $1 billion in services, making CoreWeave its largest vendor last year. As the competitive landscape heats up, OpenAI secured a $12 billion deal with CoreWeave in March, further intensifying the rivalry. Reports have circulated for months regarding Lambda's plans to raise hundreds of millions at a valuation exceeding $4 billion, with speculation about a potential IPO. Previously, Lambda had raised $480 million in a Series D funding round in February, achieving an estimated valuation of $2.5 billion, according to Pitchbook. The recent $1.5 billion funding significantly surpasses earlier estimates, though the exact current valuation remains unconfirmed as Lambda has chosen not to comment.