Lambda is in talks to raise up to $3bn in pre-IPO financing at a valuation of $12bn or more, according to Bloomberg, as the Nvidia-backed cloud provider prepares for a listing expected next year.
The raise follows a very different kind of financing earlier in its run, when Lambda borrowed $917mn against its GPUs to buy more chips from the company that also invests in it.
The business is straightforward to describe and expensive to run. Lambda rents out Nvidia accelerators and the surrounding infrastructure to companies training and serving AI models, competing with the hyperscalers on price and with a growing field of specialist neoclouds on availability.
Equity ahead of an IPO does something the leveraged loan could not. Debt secured against depreciating hardware is an unforgiving instrument, and a public market debut is easier to price when the balance sheet is not dominated by borrowings against chips whose resale value nobody can confidently forecast.
Terms are not finalised and the discussions remain confidential, so neither the investor list nor the final size has been reported. Lambda has not commented publicly.
