AI data center provider Lambda raises whopping $1.5B after multibillion-dollar Microsoft deal

AI data center provider Lambda announced Tuesday it raised $1.5 billion in a round led by TWG Global, a relatively new $40 billion investment firm formed by billionaires Thomas Tull, the former owner of Legendary Entertainment, and Guggenheim Partners founder and CEO Mark Walter.

TWG holds a variety of the billionaires’ assets, including Walter’s stakes in the Los Angeles Lakers and the new Cadillac F1 racing team. The firm also has a $15 billion fund to invest in AI anchored by Abu Dhabi’s Mubadala Capital. TWG previously invested in a partnership with Elon Musk’s xAI and Palantir to sell AI agents to enterprises.  

Now it’s backing Lambda, which operates a number of U.S. AI data centers. Lambda is a CoreWeave competitor, although it also sells its “AI factories” to hyperscaler clouds. Earlier this month, Lambda announced a multibillion-dollar deal to supply Microsoft with AI infrastructure using tens of thousands of Nvidia GPUs. (Nvidia is an investor in Lambda as well.) 

Remember that Microsoft had a similar deal with CoreWeave and had bought about $1 billion worth of services from the company in 2024, its largest customer last year by a mile. Then OpenAI swooped in and signed a $12 billion deal with CoreWeave in March. 

Meanwhile, deal watchers have been talking for months about Lambda looking to raise hundreds of millions of dollars at a valuation north of $4 billion. There was also talk of an IPO. Prior to this, Lambda raised a $480 million Series D in February, with an estimated valuation of $2.5 billion, according to PitchBook.  

Lambda’s $1.5 billion raise far outstrips those earlier whispers of what it was seeking. Whether its valuation also soared, we can’t confirm and Lambda declined to comment on that.