Rackspace signs multi-year compute deals with Together AI and Blacksmith

Rackspace has signed two multi-year compute capacity agreements: one with neocloud startup Together AI, the other with code-testing platform Blacksmith. Both deployments start in 2027, and one already carries a fixed size of roughly 2MW.

The Together AI contract covers dedicated Nvidia GB300 NVL72 infrastructure that Rackspace will provide and operate on a multi-year basis. Deployment is planned for 2027. Rackspace will also run the associated power, liquid cooling, networking, and storage.

Neither company disclosed the capacity volume or the specific data center. Rackspace described the site only as a "purpose-built, liquid-cooled facility, supported by Nvidia networking."

What does the deal actually cover?

The agreement is operational, not just a supply contract. Rackspace takes responsibility for running the full stack around the GPUs, from power and cooling to storage and networking.

"Enterprise AI requires more than access to compute. Success depends on bringing compute into production, operating it reliably and delivering sustained value. That requires deep infrastructure and engineering expertise combined with operational accountability," said Gajen Kandiah, CEO of Rackspace.

He added: "Rackspace brings more than 25 years of experience operating complex enterprise environments. Today's announcement provides an opportunity to apply that experience to the dedicated infrastructure supporting Together AI's inference platform."

The two companies also signed a separate, non-binding letter of intent. Under that LOI they will explore a joint go-to-market approach for enterprise AI solutions, with Together AI supplying inference capabilities and Rackspace supplying the underlying AI infrastructure.

"Scaling in the enterprise requires infrastructure that can grow with our ambitions while delivering the performance and reliability customers expect," said Vipul Ved Prakash, founder and CEO of Together AI. "Rackspace brings the infrastructure engineering and operational expertise to support that growth, and we look forward to exploring additional opportunities together."

What does the second contract involve?

The Blacksmith agreement is also multi-year. Rackspace will provide the infrastructure platform with dedicated compute powered by AMD Epyc CPUs, plus storage, totaling approximately 2MW of capacity in Northern Virginia. Rackspace operates a data center in Ashburn, Virginia. Deployment begins in early 2027.

Aditya "JP" Jayaprakash, co-founder and CEO of Blacksmith, explained the demand driver behind the deal:

"When we talk to developers and engineering teams, we keep hearing that AI is making it much easier to write code, but getting those changes tested and ready to ship is becoming the bottleneck. We're building Blacksmith to help developers merge code faster and feel confident about what they're shipping. Our partnership with Rackspace will help us scale the infrastructure behind that work."

The Blacksmith deal fits an existing arrangement. Rackspace already has an agreement with AMD to deploy 30MW of dedicated AMD compute across its data centers through 2028.

Where does the money come from?

This month Rackspace also entered a share purchase agreement with an investor group led by Voss Capital, LP. The deal provides an aggregate $66 million private placement of Rackspace common stock.

The company will spend the funds on:

• general corporate purposes
• working capital
• capital expenditures
• growth capital, including GPU-related initiatives

The GPU plans have a caveat. Rackspace said it expects to seek separate financing to purchase the Nvidia GB300 NVL72 systems for Together AI and is in active discussions with potential lenders. As of the time of writing, no definitive GPU financing commitment has been obtained.

That gap matters. The Together AI deployment depends on hardware Rackspace has not yet locked in funding for. The 2027 timeline leaves room, but the financing step is now the thing to watch.

Taken together, the two contracts show Rackspace moving deeper into dedicated AI and compute infrastructure, pairing its operations business with GPU- and CPU-based capacity for customers that build on top of it.