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Lambda Hits $1.5 Billion Valuation for AI Computing

Lambda, a startup that sells cloud computing services and computers for training artificial intelligence software, has raised $320 million in a new funding round that valued the company at $1.5 billion.

The startup raised $320 million in a new funding round.

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The financing, set to be announced Thursday, was led by billionaire Thomas Tull’s US Innovative Technology and includes new investors such as B Capital, SK Telecom, and Super Micro Computer Inc., as well as existing investors including Crescent Cove and Bloomberg Beta, the venture-capital arm of Bloomberg LP.

The financing comes at a time when demand has skyrocketed for the powerful chips used to train and run AI software, buoyed by the popularity of cutting-edge AI applications like OpenAI’s ChatGPT chatbot and image generator Midjourney. Lambda plans to use the funding to pay for more GPUs for its cloud computing service and to hire more employees, said Chief Executive Officer and co-founder Stephen Balaban.

“It’s going to put us in a position to compete in providing that underlying infrastructure for machine learning engineers,” Balaban said.

Founded in 2012, Lambda focused initially on offering facial-recognition software; it evolved to include machine learning consulting and contracting, and in 2015 launched an app called Dreamscope that let users apply AI filters to images.

Lambda spent $60,000 to build its servers to offset this cost, which eventually led to its current incarnation as a provider of computing services and hardware to other companies.


Image: Lambda