Lambda Raises $1 Billion Debt to Expand Nvidia AI Chip Infrastructure

AI cloud provider Lambda has secured $1 billion in private debt to purchase Nvidia AI chips that it plans to lease to enterprise customers, according to Bloomberg.

The financing highlights how companies building AI computing infrastructure are increasingly using debt to acquire expensive hardware needed to meet growing demand for GPU capacity.

The deal, arranged by JPMorgan Chase, is structured around Lambda’s expectation that it can deploy the chips quickly and generate revenue from customer contracts. The company would then use that income to repay the short-term financing.

Lambda has already used debt financing to expand its AI infrastructure. In May, the company closed a $1 billion secured credit facility, and it recently announced a $926 million loan to fund Nvidia GB300 GPU infrastructure for a customer deployment.

The latest financing comes as Lambda is reportedly exploring a larger funding round. The company is in discussions for a $3 billion pre-IPO round, following its previous $1.5 billion venture capital raise at a reported $5.43 billion post-money valuation.

Lambda’s approach reflects a broader trend among AI infrastructure companies that are using alternative financing methods to acquire GPUs and build computing capacity. Expensive AI hardware has become one of the highest costs for companies supporting large-scale AI workloads.

According to Bloomberg, banks and technology companies have raised hundreds of billions of dollars in AI-related debt globally this year as the industry invests heavily in computing infrastructure.

Lambda’s expansion strategy depends on securing advanced chips, deploying them for customers, and turning those assets into recurring AI cloud revenue.