Investment in AI Infrastructure by AMD and LuminArx

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

The West Palm Beach, Florida-based Vultr, now valued at $3.5 billion, plans to use the financing to acquire more graphics processing units (GPUs), the chips that power AI models.

Vultr, originally providing cloud-computing for businesses' information-technology systems, also offers AI computing. The company anticipates its AI cloud service, where it leases GPU access to customers, to soon become the largest part of its business.

For AMD, the investment is a strategy to introduce customers to AMD GPUs through Vultr's platform, according to Mathew Hein, AMD’s chief strategy officer of corporate development. Hein sees Vultr as a key player in expanding AMD capacity in the present and future generations.

While AMD aspires to be Vultr’s "preferred" AI hardware provider, Hein stated that the choice will not be imposed on Vultr. Earlier this year, AMD introduced its latest generation of AI chips, the MI325X, and plans to launch the next generation, MI350 chips, next year.

Earlier this month, Vultr revealed plans to construct its first "supercompute" cluster with thousands of AMD GPUs at its Chicago-area data center.

This funding round is reminiscent of similar moves by AI chip market leader Nvidia (NASDAQ:NVDA), which, along with other investors, provided over $400 million to AI cloud provider CoreWeave in 2023. CoreWeave also secured $2.3 billion in debt financing last year by using its Nvidia GPUs as collateral.

Both Nvidia and AMD have distributed access to their GPUs to a large number of cloud providers. Dave McCarthy, a research vice president in cloud and edge services at research firm International Data Corp (IDC), stated that AMD's association with an emerging cloud provider like Vultr could enhance its market visibility.

AMD's previous investments include cloud providers such as TensorWave, which also provides an AI cloud service. In August, AMD acquired data-center equipment designer ZT Systems for nearly $5 billion.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.