Alphabet’s CapitalG and Nvidia are in talks to invest in Vast Data at a potential valuation of up to US$30 billion, according to sources.

Vast Data is a New York-based company that develops storage technology for large AI data centers. Their clients include xAI and CoreWeave.

The funding round may involve several billion dollars and could close in the coming weeks.

A source familiar with Vast Data’s financials said it earned US$200 million in annual recurring revenue by January 2025.

It has previously raised about US$380 million, with its last valuation at US$9.1 billion in 2023.

Vast Data has indicated it may consider an IPO, though no specific plans have been announced.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Profitable AI infrastructure companies command exceptional valuation premiums

Vast Data’s potential jump from a $9.1 billion valuation in 2023 to $30 billion represents one of the most dramatic valuation increases in recent tech history, driven by rare profitability in the AI sector.

The company has maintained positive cash flow for over five years while achieving 2.5x to 3x annual growth rates1, a combination that’s extremely uncommon among high-growth AI startups.

This financial performance, combined with projected revenue growth from $200 million to $600 million in annual recurring revenue within a year2, demonstrates the type of unit economics that investors are willing to pay massive premiums for.

The valuation multiple reflects how scarce cash-flow positive AI infrastructure companies are in a market where most AI startups operate at significant losses during their growth phases3.

2️⃣ AI infrastructure investment surge reflects massive anticipated power demands

Vast Data’s funding discussions occur amid unprecedented infrastructure investment, with AI startups raising $104 billion in just the first half of 20254.

This investment boom directly correlates with projections that U.S. data center power demand will skyrocket from 4 gigawatts in 2024 to potentially 123 gigawatts by 20355.