Shamraiz | December 19, 2024
Cloud computing startup Vultr has managed to succeed in a growth financing of $333 million led by Advanced Micro Devices (AMD) and LuminArx Capital Management. So much funding is an appreciation of the growing demand on artificial intelligence infrastructure, it is one of the salient points in the passage of Vultr. The company is now based in Florida and valued at $3.5 billion, and the firm plans to use the raised funds to buy more GPUs to power its AI models. This is the first time Vultr has ever taken external capital.
Originally a cloud-computing business IT systems provider, Vultr lately has started to focus towards AI computing. Its new AI cloud service, now leasing access to GPU clients, is quickly becoming a cornerstone of its business operations. Vultr’s chief executive, J.J. Kardwell, confirmed the rising significance of that service, suggesting it eventually will account for most of company revenues.
Earlier this month, Vultr announced plans to build its first “supercompute” cluster. The cluster, based in the Chicago area, will feature thousands of AMD GPUs, marking a significant move for Vultr in an effort to become a leader in AI infrastructure.
AMD’s Investment and Strategic Goals
For AMD, investment in Vultr is an entry point for customers to experience its GPU technology. Mathew Hein, AMD’s chief strategy officer, said that Vultr is well-positioned to be a key partner in demonstrating AMD’s current and future generations of GPUs. Although AMD wants to be the preferred hardware provider for Vultr, the company will remain multi-GPU and will continue to offer both Nvidia and AMD products to address the various needs of the market.
This follows the launch of AMD’s next-generation AI chips, the MI325X, with a future release of the MI350 series. The alliance with Vultr is expected to enhance AMD’s market presence in the competitive landscape of AI hardware, a space long dominated by Nvidia.
The latest round of funding by Vultr mirrors a broader trend in the AI chip market. Nvidia, the current leader in the market, recently raised over $400 million for CoreWeave, another AI cloud provider, in 2023. CoreWeave also raised $2.3 billion in debt financing using Nvidia GPUs as collateral. With an estimated 95% share of the AI chip market, companies like AMD and startups such as SambaNova Systems are trying to find their niches.
AMD’s investments in cloud providers, such as TensorWave and its latest acquisition of ZT Systems for close to $5 billion, reveal its aggressive thrust to usurp the leadership role of Nvidia. Major players like Microsoft, Meta Platforms, and Oracle have also integrated AMD GPUs into their AI efforts.
Future of AI Infrastructure
According to IDC, a market for AI semiconductors is forecast to rise to $193.3 billion by 2027, from this year’s $117.5 billion. Vultr contributes to this growing space. The company has the breadth of customers, with examples such as Activision Blizzard and Bharti Airtel. With the need to deploy AI models constantly accelerating, Vultr can capture this growth by utilizing advantages in speed and bandwidth.
The transition from a traditional cloud platform to an AI-focused provider reflects a broader industry shift, and Vultr is setting the future of AI infrastructure in motion with its sights on generative AI and robust partnerships with chip manufacturers.
