Lambda is in talks to raise up to $4 billion at a pre-money valuation of $14.5 billion, the WSJ reports, citing sources. Blackstone and Coatue are the lead investors, and this round could be the final private financing before an IPO, which the company plans for 2027. Negotiations in August had centered on a $3 billion raise at a valuation starting at $12 billion.
The increase in valuation is driven by the company's order backlog. According to a letter to investors seen by the WSJ, the backlog grew from $15 billion in June to $50 billion in September. A $35 billion contract with Anthropic accounted for the bulk of this growth.
On October 1, Lambda secured a $1.008 billion loan with a fixed annual interest rate of 6.78% and a 2033 maturity date. The funds will be used to purchase GPUs for three contracted deployments with two investment-grade clients; the money is being disbursed in tranches as the clusters come online. The loan is secured by the servers themselves and the contract payments, and it has received an investment-grade rating from both Moody's and Morningstar DBRS.
The convergence of these two deals is significant for investors. Lambda is transforming from a venture-backed AI cloud provider into an infrastructure company that finances GPU purchases through debt backed by signed contracts. This marks the second such loan in five weeks, with Moody's assigning the new loan a rating one notch higher than the August one.
The return on the Lambda investment since entry in 2023 stands at 25x, demonstrating the critical importance of AI infrastructure given current market realities and the shortage of computing power.