Artificial intelligence infrastructure startup Lambda Inc. today announced that it has closed a late-stage funding round worth more than $1.5 billion.

TWG Global, a holding company led by billionaire investors Thomas Tull and Mark Walter, led the Series E transaction. It was joined by Tull’s US Innovative Technology Fund. The latter firm previously led a $320 million funding round for Lambda last year.

Founded in 2012, Lambda operates a cloud platform optimized for AI workloads. The platform provides access to AI environments called Superclusters that can be provisioned with upwards of 165,000 graphics cards. According to Lambda, customers have control over the firewall that regulates access to their Superclusters and the associated encryption keys.

The company also provides other infrastructure options. Lambda customers with limited computing requirements can lease individual instances that each include up to eight graphics processing units. Last year, the company introduced AI clusters called 1-Click Clusters that include up to 2,000 GPUs and can be leased for a few days.

Lambda provides managed versions of Kubernetes and Slurm to help customers manage the infrastructure they provision in its cloud. Kubernetes is best suited for inference workloads, while Slurm lends itself to powering long-running training workflows. Lambda’s managed implementations automate some of the manual work involved in managing the two frameworks.

The company also invests in AI research. It has developed a type of AI model called a latent thought model, or LTM, that creates an abstract representation of the data it processes. According to Lambda, that feature enables LTMs to perform tasks such as arithmetic calculations better than several competing architectures.

According to the Wall Street Journal, the company will use its newly raised capital to build data centers. Lambda will reportedly hire supply chain specialists, engineers and other technical professionals to expedite the effort.

The company previewed one of its upcoming facilities late last month. Lambda plans to turn a building in Kansas City, Missouri into an AI data center with 24 megawatts of initial computing capacity. The facility is expected to contain 10,000 of Nvidia Corp.’s top-end Blackwell Ultra graphics cards when it will open early next year.

“This round of funding helps enable Lambda to develop gigawatt-scale AI factories that power services used by hundreds of millions of people every day,” said Lambda co-founder and Chief Executive Officer Stephen Balaban.

It’s possible some of the data center capacity Lambda is building will be made available to Microsoft Corp. under a cloud contract the companies signed this month. The agreement, which is worth several billion dollars, will see Lambda host tens of thousands of GPUs for the tech giant. 

Photo: Lambda