Cloud provider Lambda to raise up to $4 billion ahead of planned IPO

Cloud provider Lambda is raising up to $4 billion at a pre-money valuation of $14.5 billion, according to The Wall Street Journal. The round could be the company's last private financing before a planned initial public offering in 2027. Coatue Management and Blackstone are leading it.

Backlog has surged

An investor letter seen by the Journal shows Lambda's backlog climbed from $15 billion in June to $50 billion in September. A large share of that rise comes from a $35 billion commitment from Anthropic, which signed a deal with Lambda in late August. As a result, Lambda's valuation, which has risen markedly since its 2025 funding round, may depend heavily on Anthropic's ability to keep paying.

Even so, with dependable GPU capacity in short supply, investors appear willing to back companies that provide it, particularly those holding large contracts with a major AI lab.

The challenge is financing

For so-called neoclouds such as Lambda, demand is not the main problem; the cost of meeting it is. Data center construction is largely financed with debt, and Lambda raised another $1 billion in debt last week. Lenders are becoming more selective about whom they lend to and on what terms.

Raising more capital now will set the tone for the IPO's pricing and give the company access to funds before public-market scrutiny begins. Lambda was reportedly meant to debut this year but postponed the listing amid market uncertainty.

If it does go public, Lambda will join other Nvidia-backed neoclouds, such as CoreWeave and Nebius, whose data center expansion now depends on the health of their share prices. British neocloud Nscale filed for an IPO last month and is expected to start trading soon.

Lambda, Coatue and Blackstone did not immediately respond to requests for comment.