A sign is posted in front of the Advanced Micro Devices (AMD) headquarters on May 10, 2022 in Santa Clara, California.
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Vultr, a startup that rents out graphics processing units and other cloud infrastructure to businesses, has raised $333 million in a transaction that values the company at $3.5 billion. AMD‘s venture arm and hedge fund LuminArx Capital Management led the round.
Founded in 2014 and known as a low-cost virtual server provider, Vultr offers GPUs from AMD and rival Nvidia, which are in high demand due to the boom in generative artificial intelligence. It’s the first time the company has taken equity financing, though Bank of America and JPMorgan Chase agreed to extend a $150 million credit facility for the company in 2021.
Nvidia, the biggest beneficiary thus far of the AI wave, has invested in specialist cloud providers CoreWeave. AMD’s central processing units are also available through Vultr, alongside Intel’s.
Unlike some top cloud providers, Vultr doesn’t have its own AI chip that competes with AMD or Nvidia.
“We will never seek to build GPUs and compete with that layer,” Vultr CEO J.J. Kardwell told CNBC in an interview.
AMD offers very good prices based on performance for the inference stage of working with AI models, which tends to be critical for organizations deploying AI at scale, Kardwell said. Companies generally train AI models with large quantities of data and vast fleets of GPUs before moving on to the inference stage, when the models respond to — or make inferences about — new information.
The fresh infusion of capital will go toward international expansion, Vultr said in a statement. The company currently has 32 data center locations, mostly outside North America. Customers include Microsoft’s Activision Blizzard, according to The Wall Street Journal, which reported earlier on Vultr’s funding.
DigitalOcean, a competitor to Vultr, went public in 2021 and is now similarly valued at $3.5 billion.
