Lambda, a cloud computing firm, has announced a major deal with tech giant Microsoft (MSFT) to build artificial intelligence infrastructure using tens of thousands of Nvidia chips. Although the exact dollar amount wasn’t shared, CEO Stephen Balaban told CNBC that this agreement comes at a time when more people are using AI tools like ChatGPT and Claude. More precisely, he said that we are in the middle of one of the biggest technology buildouts ever, and this new deal builds on Lambda’s long-standing relationship with Microsoft, which began in 2018.
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Interestingly, Lambda was founded in 2012 and helps developers train and deploy AI models by offering cloud services and software. It already supports over 200,000 developers and rents out servers powered by Nvidia’s (NVDA) advanced GPUs. This new partnership will include powerful NVIDIA GB300 NVL72 systems, which are also used by other large-scale AI infrastructure providers like CoreWeave (CRWV). In addition, Balaban praised Nvidia’s hardware by saying that it makes the best accelerators for AI work.
To keep up with growing demand, Lambda is expanding its physical footprint. Indeed, the company operates numerous data centers and plans to continue leasing additional ones while also building its own. Moreover, in October, Lambda shared plans to open a new AI factory in Kansas City in 2026, which will launch with 24 megawatts of capacity and could scale up to over 100 megawatts. This highlights just how fast AI infrastructure is growing.
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Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 33 Buys assigned in the last three months. Furthermore, the average MSFT price target of $632.78 per share implies 22.7% upside potential.
