Meet a decades-old software company hitching a ride on the Nvidia rocket ship
OSH EDELSON/AFP via Getty Images
- The AI boom is changing the trajectory of decades-old computing companies.
- DDN, known in the supercomputing field, now offers crucial data storage for AI data centers.
- The company recently raised $300 million from Blackstone at a $5 billion valuation.
As Nvidia CEO Jensen Huang gave his keynote address at the company's annual GTC conference to an audience of roughly 17,000 people in San Jose, California, last week, dozens of companies sat on the edge of their seats to find out if they'd get a mention. Some had a glimpse of the slides ahead of time, but no one knew for certain until the words came out of Huang's mouth.
DataDirect Networks, or DDN, was one of the lucky ones to leave the arena happy. Huang named the company alongside Dell, HP Enterprise, Hitachi, and IBM. But while those firms have enjoyed broader name recognition in the tech world for decades, DDN was invited on the rocket ship that is Nvidia just a few years ago — and everything changed.
DDN makes hardware, but more importantly software that allows GPU users to access their stored data fast. It cuts down on latency, which is the industry term for lag in AI systems that can delay, for example, the answer to a question asked of a chatbot like ChatGPT.
When Nvidia sells $100 worth of GPUs, DDN's opportunity is $5-10 dollars.
"You have to have the right amount of performance, reliability, and stability to extract your data at full speed, real-time, to feed the GPUs," Paul Bloch, DDN's 64-year-old President, told Business Insider.
The company has been working with Nvidia for about eight years. Before that, it served the stable, but much smaller industry of supercomputers for decades.
Bloch and CEO Alex Bouzari are fixtures of the supercomputing world. Before the AI boom, top research universities, government labs, and the oil and gas industry knew them well. But mainstream data centers didn't need them. They do now.
"For the very first time, your storage system will be GPU-accelerated," Huang said at GTC.
DDN
As data sets grow larger and AI is used at scale for data-heavy applications like real-time video, Bloch can see a day when the company scales independently of Nvidia.
"All of a sudden it's much easier to deliver the value in AI because we've already done it in the past with similar market,' Bloch said. "That's why the success of the company has gone exponential."
DDN has found a new gear in the age of AI. Conversations, fixes, new features, and deals that used to take weeks and months now take days. And Bloch and his team are learning to work at Jensen Huang's pace — what he calls the "speed of light."
"Jensen's emails are fantastic. They are 10 words or less," Bloch said.
Moving into the era of AI has taken some adjustments, but today, DDN and its competitors are essential to the parallel computing that enables AI. When a company seeks to set up a GPU cloud, it has to have a version of DDN's tech. And DDN is part of Nvidia's reference architecture, which is the recommended setup for maximal GPU performance.
Not all of Nvidia's customers choose to use these instructions, but the mere fact has brought DDN new customers. Hyperscalers have traditionally preferred to use their own recipes of parts and players in their data centers, but Bloch said that in the era of Nvidia's Blackwell, they are starting to come around.
Now it's preparing for a blockbuster third decade. In January, the company raised $300 million in growth funding from Blackstone at a $5 billion valuation, and Bloch got a congratulatory email from Huang at 6:30 a.m. the morning of the announcement, he said.
"DDN does not need the money, per se," Bloch said. "We're profitable. We're EBITDA positive, we're growing very quickly."
What he wants, though, is access to the C-suites that come with a Blackstone affiliation. DDN used to sell through researchers and developers — after all, the technology was so niche that it was far below top executives' notice. Now, AI infrastructure is one of the most important expenditures a company can make, and decisions around it are scrutinized at the highest levels.
DDN has received acquisition offers over the years, but Bloch said the company is his and Bouzari's "life's work" and they stay independent by choice.
"We are control freaks," Bloch said, adding that he sees two to five years more of break-neck AI infrastructure buildout.
"I'm not even sure it's going to stop," he said.