Nvidia looks to bolster AI earnings with stake in Lambda Labs

Lambda Labs is a smaller cloud company with plenty of ambition, looking to carve out a space in the market with AI training services and powerful data centres. Back in March following an investment round that generated over $44 million, it was announced that Lambda would be adding thousands of Nvidia H100 GPUs to its servers. Now a few months later, it appears that an even bigger deal is in the works between Nvidia and Lambda. 

Today, The Information reported that Nvidia and Lambda Labs are nearing an equity deal. The deal would bring in around $300 million in capital for Lambda and would value the company at $1 billion. Nvidia also bought a similar stake in another cloud company, CoreWeave. Naturally, Nvidia has been supplying GPUs to both. While not officially confirmed by Nvidia or Lambda Labs, the report cites sources familiar with “knowledge of the situation”.

Nvidia has a strong position in the AI market, as it leads in AI performance with the H100 GPU. These GPUs are in high demand among clients but there is only so much supply to go around. By supplying smaller cloud AI providers like Lambda Labs, Nvidia can help boost competition, and by owning a piece, it can strengthen its position further.

Nvidia's value recently boomed on the back of recent AI hype, although shares have dipped from $480 to $469 as of today. Still, this is a huge boost over the company's 52-week low of $108.13, so Nvidia has rebounded nicely.

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KitGuru Says: With Nvidia holding such a lead in the AI GPU market, it is going to be difficult for competitors to catch up. 

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