AMD is investing in GPU cloud provider Vultr at a $3.5 billion valuation

Vultr, a startup that rents GPUs and other cloud infrastructure to businesses, has raised $333 million in a deal that values ​​the company at $3.5 billion. AMDVenture arm and hedge fund LuminArx Capital Management led the round.

Vultr was founded in 2014 and is known as a low-cost virtual server provider, offering GPUs from AMD and competing companies NvidiaThe demand for which is increasing due to the boom in generative artificial intelligence. It is the first time the company has received equity financing, although Bank of America and JPMorgan Chase have agreed to provide a $150 million credit facility to the company in 2021.

Nvidiathe biggest beneficiary so far of the AI ​​wave, has invested in specialist cloud service providers CoreWeave. AMD CPUs are also available through Vultr, alongside Intel.

Unlike some major cloud providers, Vultr doesn't have its own AI chip that competes with AMD or Nvidia.

“We will never look to build GPUs and compete with that layer,” Vultr CEO JJ Cardwell said in an interview with CNBC.

AMD offers very good pricing based on performance in the inference phase of working with AI models, which tends to be crucial for organizations deploying AI at scale, Cardwell said. Companies generally train AI models using large amounts of data and large fleets of GPUs before moving to the inference phase, when the models respond to—or reach inferences about—new information.

Volter said in a press conference that the new capital injection will be directed towards international expansion statement. The company currently has 32 data center locations, most of which are outside North America. Includes clients Microsoft Activision Blizzard, according to The Wall Street Journalwhich previously reported on the financing of Vultr.

Digital Oceana competitor to Vulr, went public in 2021 and is now valued at $3.5 billion.

He watches: The cloud computing environment is still “very healthy,” says Eric Sheridan of Goldman Sachs