Lambda, a cloud startup providing access to GPUs for AI development and training, raised $480 million in Series D funding led by Andra Capital and SGW, with ARK Invest and Nvidia among participating investors.
Neocloud startups like Lambda have exploded in popularity. VC funding increased 270% year-over-year in 2024 as these startups raised $3.7 billion across 50 deals, up from $1.0 billion invested into 39 deals in 2023, according to PitchBook data. For comparison, Lambda’s Series D is more than double what the entire vertical raised in all of 2018.
Lambda last raised funding in February 2024, when it received $320 million Series C that valued the company at over $1.5 billion. The Series D brings the total capital raised by the San Jose-based startup to over $800 million.
An updated valuation was not disclosed, but Lambda confirmed it’s in excess of $2.4 billion.
The growth trajectory for neoclouds has been driven exclusively by the desire to build, train and fine-tune AI models and the insatiable resources required to do so. GPUs, like the ones Nvidia makes, have become coveted commodities because they can process more-intensive AI workloads more efficiently. But access to these GPUs has been strained since 2021 when a rush to mine cryptocurrency caused a massive supply chain backup that got further exacerbated in 2023 during the AI boom.
One notable company is CoreWeave, a New Jersey-based AI cloud provider that got its start as a cryptocurrency miner, and raised a $1.1 billion Series C led by Coatue in May 2024. It’s reportedly been eyeing a 2025 IPO. And in December, San Francisco-based GPU cloud provider Crusoe, which aims to provide a more energy-efficient and sustainable infrastructure for AI computing, raised a $600 million Series D led by Founders Fund with participation from Nvidia.
Close-up of the modern data center and cabinets.
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