Nvidia-backed cloud-computing company Lambda is raising up to $4 billion in a final round of fundraising before the company's planned initial public offering, according to people familiar with the matter.
The new funding will give the company a valuation of $14.5 billion, excluding the amount of the money raised.
The pre-IPO funding round is led by investment firms Blackstone and Coatue Management, both of which have been highly active in the artificial-intelligence and data-center industries.
Lambda management is targeting an IPO in 2027, subject to execution and market conditions, according to a letter sent to the company's limited partners reviewed by The Wall Street Journal.
Lambda's backlog -- or total orders that have yet to be filled or shipped -- grew from $15 billion in June to $50 billion in September of this year, according to the letter.
A Lambda spokesman declined to comment.
Since the spring, the company has been making personnel moves seen as preparing it for public-market scrutiny. In May, Lambda replaced Chief Executive Stephen Balaban, one of the startup's co-founders, with Michel Combes, a veteran CEO formerly of Brightspeed, SoftBank International, Sprint and Alcatel-Lucent. Balaban shifted to the role of chief technology officer.
The company has also looked to the telecommunications industry for additional executive and board talent, adding AT&T CEO John Donovan as a director and hiring Charles Fisher as chief financial officer. Fisher had been executive vice president of corporate finance and development at broadband provider Charter Communications and CFO at car-sharing service Turo.
Lambda is one of a growing crop of startups known as neoclouds, a type of digital infrastructure company that buys graphics-processing units and other chips tailored for training and running large language models then leases them to customers who need computing power to build or use AI tools.
Nvidia has been on an investing tear recently, pumping billions into the neocloud space. The market-leading chip designer owns roughly 10% of both CoreWeave, which went public last year, and Netherlands-based Nebius. Other neoclouds Nvidia has backed include Iren, Firmus and Nscale.
In February 2025, Nvidia participated in Lambda's $480 million Series D fundraising round. The company's most recent funding round, in November, was led by investors Mark Walter and Thomas Tull's TWG Capital and raised $1.5 billion at a post-money valuation of $5.9 billion, according to company announcements and valuation estimates by venture-capital platform Forge Global.
Founded in 2012 by twin brothers Stephen and Michael Balaban, both University of Michigan-trained computer scientists, Lambda has long pitched itself as a cloud company run by engineers with a deep understanding of AI technology.
Neoclouds have been red-hot over the past year, as more corporations adopt enterprise AI tools. Lambda has been loyal to Nvidia's technology, using its chips and server racks exclusively, Stephen Balaban told the Journal earlier this year.
The letter said that the jump in Lambda's backlog was driven primarily by a $35 billion commitment from Anthropic, maker of the popular Claude family of models. In late August, the Journal reported that Anthropic had signed the $35 billion cloud deal to rent Nvidia chips from Lambda -- in a facility that Nvidia leased from bitcoin-miner and data-center developer Hut8 in Nueces County, Texas.