Lambda Aims to Raise $4 Billion Before IPO at $14.5 Billion Valuation

Lambda, an AI cloud infrastructure company backed by Nvidia, is in talks to raise up to $4 billion in a final funding round before its planned initial public offering (IPO). According to a report by The Wall Street Journal, the funding round is being led by private equity firm Blackstone and investment manager Coatue Management. The deal values Lambda at $14.5 billion before the new capital injection.

The company's backlog has seen a dramatic surge, growing from $15 billion in June to $50 billion by September. This growth was primarily driven by a $35 billion cloud services agreement with AI developer Anthropic, which involves leasing Nvidia hardware hosted at a Texas facility operated by Hut8.

In preparation for its public market debut, Lambda has undergone significant executive restructuring. Co-founder Stephen Balaban transitioned from CEO to chief technology officer, while Michel Combes, a veteran executive with experience at SoftBank International, Sprint, and Alcatel-Lucent, was appointed as the new CEO. The company has also expanded its board with former AT&T CEO John Donovan and former Charter Communications executive Charles Fisher as chief financial officer.

Lambda operates in the rapidly expanding neocloud sector, which focuses on providing high-performance graphics processing units (GPUs) to enterprises building large language models. The company relies exclusively on Nvidia chips and server architecture. The new $14.5 billion pre-money valuation represents a substantial increase from November 2024, when TWG Capital led a $1.5 billion funding round valuing Lambda at $5.9 billion post-money.