Lambda secures $1B in debt to purchase Nvidia chips for Microsoft

Lambda, an AI cloud company, has secured $1 billion in private, short-dated debt to purchase Nvidia AI chips. The company intends to lease these chips to Microsoft, according to reports from Bloomberg and TechCrunch.

The deal, arranged by JP Morgan Chase, reflects Lambda’s strategy of using debt to finance specific GPU infrastructure for contracted customers, aiming for rapid deployment and revenue generation to repay the loans. This transaction follows other significant financing moves, including a $1 billion secured credit facility in May and a recent $926 million loan for Nvidia GB300 GPUs.

Lambda is reportedly in discussions for a pre-IPO funding round valued at approximately $3 billion. The company previously raised $1.5 billion in venture capital in November, reaching a post-money valuation of $5.43 billion.