AMD and LuminArx Secure $333 Million Funding for Cloud Venture Vultr

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AMD and LuminArx Secure $333 Million Funding for Cloud Venture Vultr

Investing.com -- Advanced Micro Devices (AMD (NASDAQ:AMD)) and hedge fund LuminArx Capital Management have completed a $333 million growth funding round for the cloud venture Vultr, reflecting strong demand for artificial intelligence (AI) infrastructure. Based in West Palm Beach, Florida, Vultr, which has a valuation of $3.5 billion, plans to use this funding to purchase graphics processing units (GPUs), which are chips that power AI models.

Initially providing cloud computing services for businesses' information technology systems, Vultr also offers AI computing services. The company anticipates that its AI cloud service, which rents GPU access to clients, will soon become the largest part of its business.

According to Mathew Hein, AMD's corporate development and chief strategy officer, this investment is part of AMD's strategy to introduce its GPUs to Vultr’s customers. Hein views Vultr as a key player in expanding AMD's capacity for both current and future generations.

While AMD aims to become Vultr's "preferred" AI hardware provider, Hein noted that this choice would not be imposed on Vultr. Earlier this year, AMD launched its latest generation AI chip, the MI325X, and plans to release the next generation MI350 chips next year.

Earlier this month, Vultr announced plans to build its first "supercomputing" cluster with thousands of AMD GPUs in its Chicago-area data center.

This funding round echoes similar moves by Nvidia, the leader in the AI chip market. Nvidia, along with other investors, provided over $400 million in funding to the AI cloud provider CoreWeave in 2023. CoreWeave also secured $2.3 billion in debt financing last year backed by Nvidia GPUs.

Both Nvidia and AMD have distributed access to their GPUs to numerous cloud providers. Dave McCarthy, vice president of cloud and edge services research at International Data Corp (IDC), noted that AMD's relationship with an emerging cloud provider like Vultr could enhance market visibility.

AMD's previous investments include cloud providers like TensorWave, which also offers an AI cloud service. In August, AMD acquired data center equipment designer ZT Systems for approximately $5 billion.