Lambda Prepares for IPO Launch, Rival to CoreWeave

Lambda, a cloud computing company, is reportedly preparing for an initial public offering (IPO) in the next year. The company provides hardware and services for artificial intelligence hyperscalers, labs, and enterprises. As a rival of CoreWeave, Lambda aims to capitalize on the growing demand for AI infrastructure.

Lambda Labs, a prominent player in the artificial intelligence (AI) infrastructure sector, is reportedly preparing for an initial public offering (IPO) in the near future. The company, which specializes in providing hardware and services for AI hyperscalers, labs, and enterprises, is gearing up to challenge established competitors like CoreWeave in the growing AI cloud market.

Lambda Labs recently secured $480 million in Series D funding, bringing its total equity capital raised to $864 million and valuing the company at $2.5 billion [1]. The funding round, led by Andra Capital and SGW, underscores investor confidence in the company’s ability to democratize access to AI infrastructure. The funds will be used to scale Lambda’s global footprint, enhance its Lambda Cloud Platform, and introduce new tools like the Lambda Model Inference API and Lambda Chat AI Assistant [2].

The company has also hired investment banks Morgan Stanley, J.P. Morgan, and Citi to facilitate its IPO, which is expected to take place in the first half of 2026 [3]. This move follows the successful public listing of rival CoreWeave in March 2025, which has set a precedent for AI cloud providers in the market. CoreWeave’s IPO filing and subsequent performance have demonstrated the potential for significant growth and valuation in the AI cloud sector.

Lambda Labs has been experiencing rapid revenue growth, with cloud revenue nearly doubling 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 [3]. This growth, combined with a gross margin of 50 percent for the year so far (excluding older non-cloud businesses), positions Lambda for a successful IPO.

CoreWeave’s recent $11.9 billion contract with OpenAI highlights the competitive dynamics in the AI cloud sector. The deal underscores the importance of reinforcement learning in AI cloud infrastructure and CoreWeave’s strategy to deepen vertical integration and expand its platform [4]. Alibaba Cloud’s aggressive AI investments, including a $4.3 billion AI capex, further illustrate the sector’s potential and the intense competition among major players [5].

Lambda Labs’ focus on developer-centric tools, compliance certifications, and strategic partnerships with hardware providers like Pegatron and Supermicro sets it apart from competitors [6]. By emphasizing accessibility and innovation, Lambda aims to capture a slice of the neocloud market, which is expected to grow as enterprises seek alternatives to hyperscalers.

Lambda’s IPO represents more than just a funding milestone; it signals a structural shift in the AI cloud landscape. As CoreWeave navigates its public market debut and Alibaba Cloud expands its AI dominance, Lambda’s unique focus on developer ecosystems and compliance could carve out a niche for itself. For investors, the company’s trajectory offers a compelling case study in the neocloud sector’s potential to disrupt traditional hyperscalers.

References:
[1] Lambda Raises $480M to Expand AI Cloud Platform [https://lambda.ai/blog/lambda-raises-480m-to-expand-ai-cloud-platform]
[2] Lambda – Funding, Valuation, Investors, News [https://parsers.vc/startup/lambdalabs.com/]
[3] Lambda Labs finalizing crossover round before IPO [https://ionanalytics.com/insights/mergermarket/lambda-labs-finalizing-crossover-round-before-ipo/]
[4] AI infrastructure startup Lambda closes $480M investment [https://siliconangle.com/2025/02/19/ai-infrastructure-startup-lambda-closes-480m-investment/]
[5] Alibaba Group Announces September Quarter 2024 Results [https://www.sec.gov/Archives/edgar/data/1577552/000110465924119688/tm2428590d1_ex99-1.htm]
[6] Lambda Secures $480M to Expand its AI Cloud Platform [https://www.dbta.com/BigDataQuarterly/Articles/Lambda-Secures-480M-to-Expand-its-AI-Cloud-Platform-168085.aspx]