- Lambda is in talks to raise up to $3 billion at a valuation of $12 billion or more, positioning it for a possible IPO next year.
- The Nvidia-backed GPU cloud provider is expected to generate more than $1.5 billion in revenue in 2026 and has already collected multiple term sheets.
- The round would come roughly nine months after Lambda’s $1.5 billion Series E, and land as rival neoclouds CoreWeave, Crusoe, and Nscale all chase similarly large raises or listings.
Lambda is talking to investors about raising up to $3 billion at a valuation of $12 billion or higher, according to Bloomberg, which cited people familiar with the discussions. If it closes, the round would set up the Nvidia-backed GPU cloud provider for an initial public offering as soon as 2027.
The California-based company has already received multiple term sheets, though people cautioned that negotiations remain fluid and that the final size, valuation, and timing could still change.
Lambda is expected to generate more than $1.5 billion in revenue in 2026, a figure that gives some sense of how quickly demand for GPU capacity is translating into actual sales in the neocloud sector.
A crowded field racing for the public markets
Lambda was founded in 2012 by twin brothers Stephen Balaban and Michael Balaban in San Jose, and has built its business renting out the GPU-heavy infrastructure that AI labs need to train and run models without owning their own data centres.
This category now widely known as “neocloud.”
CoreWeave, which went public in 2025, took a $2 billion equity investment from Nvidia in January 2026 and priced an upsized $3.5 billion convertible-notes offering in April. Crusoe, which pairs AI data centres with its own energy sourcing, closed a $1.38 billion Series E at a $10 billion valuation backed by Mubadala Capital, Valor Equity Partners, and Nvidia — and has since been in talks to raise $3 billion at a valuation near $30 billion, nearly tripling that mark in under a year.
Nscale, the London-based neocloud, is separately preparing a US IPO as early as September on the back of a $51 billion contracted-revenue backlog.
Lambda’s own most recent raise came in November 2025: more than $1.5 billion led by TWG Global, with Andra Capital, Scott Hassan’s family office SGW, OpenAI co-founder Andrej Karpathy, Cathie Wood’s ARK Invest, and Nvidia among the other backers.
That followed a $480 million Series D in February 2025, which valued the company at roughly $2.5 billion at the time — a figure that puts the scale of this potential new round in sharper relief: if the $12 billion mark holds, Lambda’s valuation will have moved nearly 5x in under two years.
What a listing would actually have to prove
Turning that growth into a public listing is a different problem than raising the money to get there. GPU infrastructure is expensive to build and depreciates the moment it’s plugged in, and Lambda is chasing the same limited pool of chips, power, and customers as CoreWeave, Crusoe, and Nscale all at once.
Nvidia itself has warned customers of AI server price increases of more than 15%, driven by memory shortages — a cost that lands directly on companies like Lambda, whose entire business is renting that hardware back out.
Public markets also apply a level of scrutiny private rounds don’t, particularly around depreciation schedules: how quickly a company writes down its GPUs shapes its reported profitability, and there’s no settled industry convention yet for how long an accelerator should be assumed to earn its keep.
That’s the real test facing Lambda and its neocloud peers as they line up for 2026 and 2027 listings — whether the economics survive contact with public-market accounting once the money is in.
