AI cloud infrastructure provider Lambda, which rents out Nvidia (NVDA) AI chips, is trying to raise at least $350M before a potential IPO this year, The Information reported, citing a person with knowledge of the matter.
Mubadala Capital, which manages money for the United Arab Emirates government and other investors, is in discussions to lead the funding round, which is structured to sell stock to investors at about a 20% lower price than what Lambda would sell stock in an IPO, the report added.
Lambda did not immediately respond to a request for comment from Seeking Alpha.
The funding would give Lambda more cash leading up to an IPO it has been planning for the second half of this year, the report noted, citing two people who have spoken to the company’s executives. This is a slight delay from the company’s previous plans for an IPO in the first half of the year.
The transaction, which is structured as convertible notes, would result in Lambda awarding participating investors millions of dollars of additional equity or cash interest payments if it does not go public within a year, the report noted.
Investors in the convertible notes would also have an opportunity to invest in the IPO, the report added. The newsletter Newcomer earlier reported some of Lambda’s funding plans.
Lambda competes in a space that has companies such as CoreWeave (CRWV), which went public last year and is backed by Nvidia (NVDA), and Nebius (NBIS).
Lambda generated over $520M in revenue in the year that spanned October 2024 to September 2025, according to the report. Third-quarter sales jumped 80% from a year earlier, the company recently told investors. It lost about $175M during that period, the report added.
In November 2025, Lambda signed a multibillion-dollar agreement with Microsoft (MSFT) to deploy AI infrastructure powered by tens of thousands of Nvidia GPUs, including NVIDIA GB300 NVL72 systems. Last year, Nvidia agreed to rent 10,000 of its own AI chips from Lambda for $1.3B over four years and made a separate $200M deal to rent 8,000 more Nvidia chips over an unspecified time frame, the report noted.