Nvidia-backed Lambda raising $4 billion at $14.5 billion before 2027 IPO

Summary

• Lambda is raising up to $4 billion in a pre-IPO round led by Blackstone and Coatue.
• The round values the AI cloud company at $14.5 billion, up from $5.9 billion in November.
• A $35 billion Anthropic contract lifted Lambda's backlog from $15 billion to $50 billion.

The latest

AI cloud-computing company Lambda is raising up to $4 billion in what it describes as its last private round before going public, people familiar with the matter told The Wall Street Journal. The round values Lambda at $14.5 billion excluding the new money, and is led by Blackstone and Coatue Management. Management is targeting an initial public offering in 2027, according to a letter to limited partners reviewed by the Journal.

Details

• The valuation jump: The $14.5 billion figure excludes the money being raised, according to people familiar with the matter. Lambda's previous round closed in November, led by Mark Walter and Thomas Tull's TWG Capital, raising $1.5 billion at a post-money valuation of $5.9 billion — less than half the new mark.
• The backlog: Lambda's backlog, meaning total orders not yet filled or shipped, grew from $15 billion in June to $50 billion in September, according to the letter sent to limited partners, which attributed the jump primarily to a single commitment rather than broad-based demand.
• The Anthropic deal: A $35 billion commitment from Anthropic, maker of the Claude models, drove most of the backlog increase, the letter said. The Journal reported in late August that Anthropic signed the deal to rent Nvidia chips from Lambda in a Nueces County, Texas facility Nvidia leased from bitcoin miner Hut 8.
• The IPO timing: The letter said Lambda is targeting a 2027 listing subject to execution and market conditions. No exchange, bank syndicate or filing date was specified, and the company has not said how much of the business would be offered.
• The management overhaul: Lambda replaced co-founder Stephen Balaban as chief executive in May with Michel Combes, previously CEO of Brightspeed, SoftBank International, Sprint and Alcatel-Lucent. Balaban moved to chief technology officer. The changes began in the spring, ahead of the planned listing.
• The board and finance hires: The company added AT&T chief executive John Donovan as a director and hired Charles Fisher, formerly of Charter Communications and Turo, as chief financial officer — both profiles associated with public-company reporting and investor relations rather than early-stage startups.
• The Nvidia position: Nvidia participated in Lambda's $480 million Series D in February 2025. The chipmaker owns roughly 10% of both CoreWeave and Netherlands-based Nebius, and has backed the neoclouds Iren, Firmus and Nscale. Its exact stake in Lambda was not disclosed.
• The business model: Lambda belongs to a group of startups known as neoclouds: digital infrastructure companies that buy GPUs and other AI chips, then lease computing power to customers training or running large language models. Lambda has used Nvidia chips and server racks exclusively.
• The company: Twin brothers Stephen and Michael Balaban founded Lambda in 2012, pitching it as a cloud company run by engineers with deep AI expertise. A Lambda spokesman declined to comment on the fundraising.

Between the lines

The valuation nearly tripled in under a year, and the backlog more than tripled in three months — but the Anthropic commitment accounts for nearly all of that increase. That concentration, alongside Lambda's exclusive reliance on Nvidia hardware and Nvidia's own investor status, is the kind of customer and supplier dependency public-market investors typically price. The executive and board hires suggest management anticipates that scrutiny.

What's next

Watch for the round's formal close and any confirmation of the $14.5 billion valuation, an IPO filing in 2027, and whether Lambda discloses additional customer commitments that reduce its dependence on the Anthropic contract.

Source: The Wall Street Journal