Alphabet’s late‑stage venture arm, CapitalG, and global chip giant Nvidia are reportedly in advanced discussions to lead a new funding round backing Vast Data, an artificial intelligence infrastructure provider, at a potential valuation of up to $30 billion. The talks, described by sources familiar with the situation, signal a renewed focus by major tech players on building the backbone of the global AI boom.
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A Rising Star: Why Vast Data Matters
Founded by tech veterans, Vast Data specialises in high-performance storage systems custom‑built for AI data centres. Its flagship technology enables rapid movement of massive datasets between GPUs and AI compute nodes, critical for training cutting‑edge models at scale. Clients reportedly include high-profile names like Elon Musk’s xAI and CoreWeave, signalling the firm’s prominence in the AI compute supply chain.
By January 2025, Vast Data had reached $200 million in annual recurring revenue (ARR) and was projecting growth to $600 million ARR within the following year. The firm is free-cash-flow-positive, having raised around $380 million in prior rounds—most recently valued at ~$9.1 billion in 2023. With the proposed new financing pushing its valuation to ~$30 billion, Vast Data would emerge as one of the highest‑priced private AI infrastructure providers globally.
What’s on the Table: Deal Terms & Participants
Sources suggest CapitalG and Nvidia are leading the funding round, which could close in the next few weeks. The total raise may span several billion dollars, drawing participation from tech giants, private equity investors, and seasoned venture firms.
- CapitalG, Alphabet’s growth-stage fund, has a history of backing tech infrastructure and AI-related platforms.
- Nvidia, already a major partner, is likely to invest financially alongside its strategic alignment via hardware synergy.
Insiders point to intensive negotiations over ownership stakes, rights, and potential board seats, typical for a round with this magnitude and complexity
Bigger Picture: AI Infrastructure as the Next Frontline
Vast Data sits at a critical junction: it provides storage optimised for AI training clusters, which require low-latency, high-throughput access to massive datasets distributed across thousands of GPUs. Its platform supports both hyperscale cloud providers and private AI compute operators, making it a core infrastructure play.
The $30 billion valuation places Vast Data among the top-tier AI startups, reinforcing a dramatic shift in investor focus toward companies enabling AI’s backend hardware and software stacks.
This comes amid a wave of recognition that AI growth isn’t just driven by models like ChatGPT, but also by the infrastructure that powers them—servers, networking, storage, and energy-efficient compute. Players like CoreWeave, Cohere, and others are building out massive GPU farms, and platforms like Vast Data make that all possible at scale.
Tech Giants Double‑Down on AI Infrastructure
Alphabet recently raised its capital expenditure guidance for 2025 from $75 billion to $85 billion, citing accelerated investment in AI-powered data centres and cloud infrastructure. This update underscores the company’s mounting confidence in AI growth and infrastructure demand, benefiting vendors like Nvidia and ecosystem partners like Vast Data.
Meanwhile, Nvidia—the first public company to briefly surpass a $4 trillion market cap—continues to dominate the AI chip market, holding over 80% AI accelerator share. Its devices are the de facto choice for training large-scale models.
Together, the two firms reflect contrasting but complementary investment profiles: Alphabet’s scale and operational depth; Nvidia’s hardware leadership and ecosystem influence.
Strategic Implications: What’s in It for the Backers?
| Stakeholder | Strategic Motivation |
|---|---|
| Alphabet / CapitalG | Deepen ties to foundational AI infrastructure; secure strategic positioning in data center storage layer |
| Nvidia | Deepen ties to foundational AI infrastructure; secure strategic positioning in data centre storage layer |
| Vast Data | Access capital scale to accelerate product R&D, infrastructure growth, and move toward IPO readiness |
| AI Ecosystem | Reinforces ecosystem maturity; fills critical infrastructure gap for hyperscalers and model developers |
With a $30 billion valuation, Vast Data positions itself for an eventual IPO, especially after appointing a seasoned CFO with public‑company experience. Analysts see this as early signals of intent to list once market conditions align.
Risks and Market Sentiment
While enthusiasm around AI infrastructure is high, some observers caution against parallels with past tech bubbles. Silicon Valley’s current investment exuberance has drawn comparisons to the late‑1990s dotcom era—massive valuations, funding rounds with speculative bets, and companies without repeatable revenue backing enormous valuations.
Vast Data’s fundamentals—free cash flow, significant ARR growth, customer base—separate it from speculative peers. Yet, at a $30 billion valuation, expectations are sky-high. Any slowdown in AI spending, economic downturn, or competition in the storage layer could test confidence.
For Nvidia and CapitalG, the deal also entails reputational risk if market enthusiasm softens. But their participation signals strong belief that AI infrastructure firms like Vast Data are durable long-term assets.
Outlook: What Happens Next?
- Funding closes in weeks: Expect announcement if deal finalises, possibly involving other major tech names or institutional investors.
- Resource expansion: Capital will likely fuel global expansion, product line innovation, and hiring across sales, engineering, and ops.
- IPO timing: Vast Data will monitor conditions—market receptivity to AI IPOs surged recently, evidenced by strong activity among infrastructure and model startups.
- Competitive dynamics: Rival storage and infrastructure vendors will face increased pressure to differentiate or pursue M&A exits.
Conclusion
The collaboration between Alphabet’s CapitalG and Nvidia in backing Vast Data at a potential $30 billion valuation is more than a funding story. It symbolises a pivotal shift in the AI landscape: the realisation that infrastructure providers underpinning AI compute deserve valuation and strategic focus.
With robust recurring revenue, a strong client list, and early unit economics, Vast Data stands out among a growing class of AI backbone players. The new capital, if secured, will not only validate its market position but also deliver the kind of scale necessary to compete globally—and perhaps go public.
As the AI era matures, deals like this underscore that real value lies not only in the AI models and services we see, but in the silent architecture powering them behind the scenes.
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