Exclusive-Alphabet's CapitalG, Nvidia in talks to fund Vast Data at up to $30 billion valuation, sources say

AI infrastructure provider Vast Data is reportedly in discussions with Alphabet's CapitalG and Nvidia for a new funding round that could value the startup at up to $30 billion, a significant increase from its $9.1 billion valuation in 2023. This potential investment highlights the increasing focus on companies building the backbone for the AI boom, given Vast Data's critical storage technology for large AI data centers and its strong financial performance, including $200 million in annual recurring revenue projected to grow to $600 million next year, positioning it as a key player and likely IPO candidate in the burgeoning AI supply chain.

Analysis

Vast Data, a private AI infrastructure provider, is reportedly in late-stage discussions for a new funding round that could elevate its valuation to as high as $30 billion, a more than threefold increase from its $9.1 billion valuation in 2023. The participation of strategic investors, including Alphabet's CapitalG and existing backer Nvidia, underscores the critical importance of the data storage and management layer in the AI technology stack. Vast Data's strong financial traction, being free cash flow positive with annual recurring revenue (ARR) of $200 million and a projection to reach $600 million next year, provides fundamental support for its valuation surge. This potential investment highlights a key trend where value is rapidly accruing to the essential 'picks-and-shovels' companies that enable large-scale AI model training and deployment. The company's market position is further solidified by its mature technology relative to competitors and its role as a key supplier to entities like xAI and CoreWeave, making it both a prime IPO candidate, as signaled by its hiring of a public-company CFO, and a logical M&A target for ecosystem builders like Nvidia.

Key Decisions for Investors

• Investors in Nvidia and Alphabet should interpret this potential investment as a strategic fortification of their AI ecosystems, aimed at securing a stake in a critical infrastructure component that supports their long-term growth in the sector.
• The dramatic valuation uplift for Vast Data signals that significant investment opportunities exist within the broader AI infrastructure space beyond semiconductors; consider increasing exposure to companies involved in specialized data storage, networking, and data center optimization.
• Monitor developments around Vast Data's potential IPO or acquisition, as either event will establish a crucial valuation benchmark for the AI infrastructure sub-sector and could act as a catalyst for re-rating publicly traded peers.