Rackspace Wins AMD AI Cloud Deal, Lifting Debt to Over 80 Cents
Updated
Updated · Bloomberg · May 30
Rackspace Wins AMD AI Cloud Deal, Lifting Debt to Over 80 Cents
1 articles · Updated · Bloomberg · May 30
Rackspace has moved out of a cash crunch as AI infrastructure spending revives demand for its cloud and data-center services, marking a turnaround for the Apollo-backed company.
AMD signed a memorandum of understanding with Rackspace in May to build an Enterprise AI Cloud, sending Rackspace’s secured debt from about 50 cents on the dollar to above 80 cents.
Palantir struck a partnership in February and Uniphore followed soon after, helping shift investor views toward Rackspace as a beneficiary of the AI boom.
Recent operations have also improved as AI demand broadens from model training to inference, and Rackspace expects earnings growth to help reduce leverage after a debt-cutting liquidity exercise two years ago.
Beyond the AI partnerships, what is Rackspace's concrete plan to tackle its massive $3 billion debt?
Is Rackspace's AI-fueled stock surge a sustainable comeback or a speculative bubble waiting to pop?