Lambda, an AI cloud company that buys computing chips and rents them to businesses, has raised $1 billion in short-term debt to buy Nvidia’s AI chips that it leases to Microsoft, Bloomberg reported.
The terms of the deal, which Bloomberg said was arranged by JPMorgan Chase & Co., indicate that Lambda is betting that it can deploy the chip quickly, start generating revenue from it, and use the incoming cash to pay down debt fairly quickly.
This is the latest in a series of loans that Lambda is leveraging to fund GPU infrastructure for certain customers. In May, the company closed on a $1 billion secured credit facility, and this week the company announced the closing of a $926 million loan to fund the introduction of the GB300 GPU, one of Nvidia’s newest chip models, under contract with Nvidia.
The $1 billion private debt deal comes as Lambda is reportedly in talks for a $3 billion pre-IPO round. The company raised $1.5 billion in venture capital last November at a post-money valuation of $5.43 billion, according to PitchBook data.
Lambda isn’t the only company relying on debt to finance the AI boom. Banks and tech companies have so far raised more than $400 billion in AI-related debt globally through 2026, according to data compiled by Bloomberg.
