Lambda in talks to raise $3 billion at up to $12 billion valuation

Lambda Inc., an AI cloud-computing provider backed by Nvidia Corp., is in talks to raise as much as $3 billion in a funding round that could set up a public listing as soon as next year.

The California-based company, part of a group of “neoclouds” that rent access to chips and other AI infrastructure, has discussed raising the capital at a valuation of as much as $12 billion or more, according to people familiar with the efforts, who asked not to be identified because the discussions are not public. Deal terms have not been finalized, and talks are ongoing.

Lambda has already received multiple term sheets for the round. The company is expected to earn more than $1.5 billion in revenue this year, some of the people said. Lambda did not respond to a request for comment.

The company raised more than $1.5 billion in a November funding round led by TWG Global. Other backers include Andra Capital, early Google investor Scott Hassan’s family office SGW, OpenAI co-founder Andrej Karpathy, Cathie Wood’s ARK Invest and Nvidia.

Investor appetite for AI chip and infrastructure companies has grown in both private and public markets this year. Nscale, which is developing data centers, is seeking to raise as much as $3 billion in an IPO that could happen as soon as next month. Crusoe, which builds and operates large data centers that power artificial intelligence, has been in talks to raise $3 billion in a round that may triple its valuation.

The excitement has driven a wave of listings. Blackstone Digital Infrastructure Trust, a data center acquisition vehicle, raised $2 billion in an IPO in May, while Brookfield-backed Csquare raised $1.21 billion in July. Switch filed confidentially for a listing earlier this month that could take place as soon as November.

Public markets for Lambda’s competitors have been volatile. CoreWeave’s shares are up 20% this year but shed nearly one-fifth of their value in the past week. Nebius Group’s US-based stock remains up about 150% this year after falling 26% from a June peak.

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