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

Lambda, a leading provider of AI data centers, announced on Tuesday that it has successfully raised $1.5 billion in a funding round spearheaded by TWG Global, a new $40 billion investment firm established by industry heavyweights Thomas Tull, former owner of Legendary Entertainment, and Mark Walter, founder and CEO of Guggenheim Partners. This new investment firm is not only managing vast assets, including Walter’s stakes in the Los Angeles Lakers and the Cadillac F1 racing team, but it also boasts a dedicated $15 billion fund aimed specifically at artificial intelligence, supported by Abu Dhabi’s Mubadala Capital. TWG has previously collaborated with Elon Musk’s xAI and Palantir to deliver AI solutions to enterprises, and now it turns its attention to Lambda, which competes with CoreWeave and also provides its AI infrastructure to major cloud services. Earlier this month, Lambda made headlines with a multi-billion-dollar agreement to supply Microsoft with AI infrastructure, leveraging tens of thousands of Nvidia GPUs—a notable partnership considering Nvidia's investment in Lambda. This comes in the context of Microsoft’s earlier arrangements with CoreWeave, where it purchased around $1 billion worth of services in 2024, making it CoreWeave’s largest client. In a competitive landscape, OpenAI recently secured a $12 billion deal with CoreWeave, intensifying the scrutiny on Lambda as it sought to raise hundreds of millions of dollars while aiming for a valuation above $4 billion. Speculation about a potential IPO has also been circulating. Previously, in February, Lambda completed a $480 million Series D funding round, achieving an estimated valuation of $2.5 billion, according to PitchBook. The latest $1.5 billion funding round significantly exceeds earlier projections, although Lambda has not disclosed whether its valuation has increased further.