William Falcon developed the favored open source tool PyTorch Lightning utilized by AI researchers. Now he has merged his startup with data center operator Voltage Park to create an “AI cloud” valued at $2.5 billion.
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William Falcon, founder and CEO of Lightning AI, began renting AI chips from data center provider Voltage Park last March to assist his customers train and fine-tune AI models. Less than a yr later, his Nvidia-backed startup is merging with the AI factory, which manages over 35,000 Nvidia GPUs.
Falcon said the combined company, called Lightning AI, was valued at over $2.5 billion and had annual recurring revenue of over $500 million, including GPU rentals booked through Voltage Park.
Lightning has evolved from the event of the favored open-source tool PyTorch Lightning, which helps researchers manage machine learning, to a software bundle that helps corporations corresponding to German chipmaker Infineon and promoting agency Monks create and optimize large language models.
Falcon had been running Lightning AI on cloud giant AWS, but last yr began tackling a brand new class of startups like CoreWeave, Nebius and Voltage Park, often known as “neoclouds,” that had emerged to fulfill rising demand for graphics processing units because it planned to launch a marketplace that will bundle rented AI chips with its AI training software.
“We met and proposed a bold idea to join forces and build a full-stack AI cloud,” says Falcon, after finding that most of the Neoclouds were higher suited to working with small startups willing to compromise to realize access to low cost chips.
Falcon founded Lightning in 2019 after completing his PhD on deep learning at NYU and interning with Yann LeCun at Facebook. Its open source tool has been downloaded greater than 400 million times and the corporate has raised over $100 million from investors including Coatue, Index Ventures and Bain Capital.
His latest partner got here from a $900 million grant from crypto billionaire Jed McCaleb, who co-founded blockchain startup Ripple and early Bitcoin exchange Mt. Gox. McCaleb’s nonprofit, the Navigation Fund, purchased 24,000 of Nvidia’s then-top-of-the-line H100 chips and founded Voltage Park to administer them, with the goal of reducing computing costs for startups Reuters Reporting.
Voltage Park CEO Ozan Kaya said Forbes that the investment has made the corporate the third largest neocloud after CoreWeave and Nebius when it comes to the chips used. The San Francisco-based company now operates six data centers in 4 states within the United States. “We looked at different options to move up the stack and Lightning was the strongest for us,” Kaya said.
Voltage Park’s unusual financing was more of an incentive than a deterrent for Falcon. Most of its Neoclouds competitors (and tech giants like Meta) have amassed debt to finance purchases of recent data centers and AI chips. CoreWeave alone has raised over $14 billion from lenders. Voltage Park had built an lively data center capability of 60 megawatts with McCaleb’s foundation as the bulk shareholder.
“It was the only Neocloud without debt,” Falcon said. “I think the first failure mode will be debt, its influence.
While OpenAI, Meta and xAI have signed data center deals with gigawatts of power, Voltage Park’s customers such as Cursor, open-source AI lab Reflection and AI video generator Higgsfield typically only require clusters of AI chips with tens of megawatts of power, Kaya said.
The McCaleb Foundation, founded in November 2023, will now hold a “significant equity stake” in the new combined company, said David Coman-Hidy, president of the Navigation Fund Forbes. Coman-Hidy added that McCaleb occasionally advised Voltage Park, but was not on the board and had no ownership interest in Voltage Park or Lightning AI. Meanwhile, the fund has increased its donor base and assets to $1.25 billion and pledged to make grants to causes addressing climate change, farm animal welfare, criminal justice reform and “open science,” he said.
