Lambda, a leading AI infrastructure provider, reportedly hires bankers for upcoming IPO.

Lambda, a cloud provider offering on-demand GPUs for AI infrastructure, is reportedly gearing up for an IPO. The company has hired Morgan Stanley, J.P. Morgan, and Citi for the listing, which could happen as early as the first half of 2026. Lambda has raised over $1.7 billion in funding, including a $480 million Series D round in February. This move follows rival CoreWeave's public listing in March.

Lambda, a cloud provider specializing in on-demand GPUs for AI infrastructure, is reportedly preparing for an initial public offering (IPO) [1]. The company has hired investment banks Morgan Stanley, J.P. Morgan, and Citi to facilitate the listing, which is expected to take place in the first half of 2026 [1]. This move comes on the heels of Lambda's significant revenue growth and follows the successful public listing of rival CoreWeave earlier this year [1].

Lambda's revenue has been growing rapidly, with a near doubling of cloud revenue in the first half of 2025. The company reported revenue of $140 million in the second quarter of 2025, an increase of nearly 60 percent year over year. This growth has outpaced Lambda's internal expectations [1]. The company's gross margin for the year so far has been 50 percent, excluding older non-cloud businesses, which had a margin of 61 percent [1].

Lambda has raised over $1.7 billion in funding to date, including a $480 million Series D round in February 2025 [1]. The company is currently valued at $2.5 billion, with recent talks suggesting a potential $500 million round that could value the company between $4-5 billion [1]. These funds have been critical for Lambda's expansion, particularly in its data center and IT hardware costs, which are inherently capital-intensive [1].

CoreWeave's IPO in March 2025 has set a precedent for AI cloud providers, demonstrating the potential for significant growth and valuation post-listing. Since its IPO, CoreWeave has continued to post impressive financial results, with revenue growing by 420 percent year over year in its first quarterly report following the listing [1]. The company's recent quarterly revenue of $1.2 billion, up 207 percent year over year, underscores the potential for strong performance in the AI cloud sector [1].

Lambda's pursuit of an IPO follows a similar trajectory to CoreWeave, aiming to unlock more bank capital and secure better financing terms. The AI cloud business model is highly capital-intensive, and many providers are operating with significant debt. By going public, Lambda can tap into new sources of funding and potentially reduce its reliance on debt financing [1].

The investment in OpenPipe by CoreWeave further demonstrates the growing importance of reinforcement learning in AI cloud infrastructure. OpenPipe's acquisition by CoreWeave highlights the company's strategy to deepen vertical integration and expand its platform to offer advanced self-learning tools to developers [2].

In conclusion, Lambda's preparations for an IPO signal a significant milestone in the AI cloud sector. The company's strong financial performance and growth trajectory position it well for a successful listing. The competitive landscape, exemplified by CoreWeave's success, is likely to drive further innovation and investment in the AI cloud market.

References:
[1] https://www.datacenterdynamics.com/en/news/ai-cloud-lambda-hires-investment-banks-in-preparation-for-ipo-report/
[2] https://www.geekwire.com/2025/coreweave-to-acquire-openpipe-a-seattle-area-reinforcement-learning-startup/