Nvidia secures a $1.5 billion contract with cloud startup Lambda, allowing for the rental of Nvidia's AI processors – leasing 18,000 GPUs over a four-year period, in preparation for Lambda's upcoming IPO.
In a significant move, cloud service provider Lambda has announced a partnership with tech giant Nvidia, leasing back thousands of GPUs over a period of time. The deal, reportedly worth around $1.3 billion, is set to make Nvidia one of Lambda's biggest clients.
Lambda, a startup that opened its doors in 2012, specialises in renting out AI server capacity to companies like Microsoft and Amazon. The leased GPU servers in question were originally purchased by Lambda from Nvidia.
Interestingly, this isn't the first time Nvidia has supported AI startups. Another AI-focused company, CoreWeave, has also benefited from Nvidia's investments. However, CoreWeave's recent financial dealings have raised eyebrows.
In 2023, CoreWeave sought a substantial loan of $2.3 billion, using its H100 GPUs as collateral. The loan amount for CoreWeave was not disclosed, nor was the outcome of the loan request. It's worth noting that CoreWeave, like Nvidia and Lambda, is an AI-centric company.
While the specifics of CoreWeave's deal are unclear, it shares similarities with Lambda's arrangement with Nvidia. Both companies have leveraged their GPU resources to secure significant agreements.
Amazon and Microsoft are among Lambda's clients, but they primarily use Lambda's services for internal purposes rather than subletting them through AWS or Azure platforms. The leased GPU servers from Nvidia, on the other hand, will reportedly be used in-house by Nvidia's researchers.
In addition to the reported $1.3 billion deal, there's also a separate agreement worth $200 million for an additional 8,000 (likely lower-end/older) chips. If finalized, this contract will further solidify Lambda's position as a key player in the AI industry.
As the AI sector continues to grow, partnerships like these are likely to become more common. Lambda, Nvidia, and CoreWeave are all positioning themselves to capitalise on this trend, providing AI resources to companies across the globe.
