AMD and LuminArx Capital Invest in Vultr

Investing.com — Advanced Micro Devices (NASDAQ:AMD) and hedge fund LuminArx Capital Management have invested $333 million in a growth financing round for cloud startup Vultr, indicating growing demand for artificial intelligence (AI) infrastructure.

Based in West Palm Beach, Vultr is now valued at $3.5 billion and plans to use the funding to acquire more graphics processing units (GPUs), the chips that power AI models.

This funding marks Vultr's first receipt of outside capital. Initially providing cloud-computing for businesses’ information technology systems, Vultr now also offers AI computing. Its AI cloud service, leasing GPU access to customers, is expected to become the largest segment of its business.

According to Mathew Hein, AMD’s chief strategy officer of corporate development, the investment allows customers to experience AMD’s GPUs through Vultr's platform. AMD aims to be Vultr’s preferred AI hardware provider without imposing this preference. Earlier this year, AMD introduced its latest generation of AI chips, the MI325X, and plans to release the next generation, the MI350 chips, next year.

Vultr has also announced plans to construct its first supercompute cluster, featuring thousands of AMD GPUs, at its data center in the Chicago area.

This investment in Vultr mirrors similar moves by AI chip leader Nvidia (NASDAQ:NVDA), which provided over $400 million to AI cloud provider CoreWeave in 2023. CoreWeave secured $2.3 billion in debt financing last year by using its Nvidia GPUs as collateral. Both Nvidia and AMD have expanded access to their GPUs among numerous cloud providers.

AMD's investment in Vultr is part of its strategy to enhance competitiveness with Nvidia, noted Dave McCarthy, a research vice president at International Data Corp (IDC). He highlighted that AMD’s association with an emerging cloud provider like Vultr could enhance its market visibility.

Additionally, AMD has invested in cloud providers such as TensorWave, which offers AI cloud services. In August, AMD acquired data-center equipment designer ZT Systems for nearly $5 billion.

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