Nvidia-backed Lambda is in talks to raise hundreds of millions at a $4–$5 billion valuation ahead of a possible IPO by year-end

Nvidia-backed Lambda is in talks to raise hundreds of millions at a $4–$5 billion valuation ahead of a possible IPO by year-end

Lambda Inc., a cloud infrastructure firm backed by Nvidia Corp., is in talks with investors about a funding round that could value the company at $4 billion to $5 billion ahead of a potential initial public offering (IPO) by the end of the year [1]. The California-based company has had preliminary discussions with bankers to potentially lead the IPO, with the funding round likely to be in the hundreds of millions of dollars.

The new financing would position Lambda as a significant player in the cloud infrastructure market, which has seen increased demand due to the rapid growth of AI and data center expansion [2]. The broader AI semiconductor sector remains robust, with Taiwan Semiconductor (TSM) projecting 30% revenue growth in 2025 [2]. The AI GPU market shows no signs of slowing, with market projections reaching $352.5 billion by 2030 [2].

Nvidia's recent success in reaching a $4 trillion market capitalization highlights the importance of advanced chips and computing ecosystems like CUDA in the AI hardware market [3]. However, export controls and geopolitical risks have introduced volatility, with China's AI industry actively seeking to develop indigenous technology to reduce reliance on U.S.-made products [3].

Lambda's strategic positioning and potential IPO come at a time of significant market volatility. The AI hardware market is experiencing notable fluctuations due to a unique arrangement requiring 15% of China-related AI chip revenue to be paid to the U.S. government in exchange for export licenses to sell their AI chips in China [3]. This arrangement has sparked debate among legal scholars and industry experts, who raise constitutional concerns about the potential violation of the prohibition on taxes on exports [3].

Despite these challenges, Lambda's focus on AI-specific hardware and its ability to leverage existing software frameworks position it as a strong contender in the AI hardware market. As the company seeks to raise $400-$500M in a funding round, investors should closely monitor its progress and the broader AI hardware market dynamics [2].

References:
[1] https://news.bloomberglaw.com/business-and-practice/nvidia-backed-lambda-eyes-funding-at-over-4-billion-valuation
[2] https://www.ainvest.com/news/chip-startup-rivos-challenges-nvidia-500m-fundraising-targets-2b-valuation-2508/
[3] https://www.morningstar.com/news/marketwatch/20250814146/how-nvidias-h20-chip-found-itself-at-the-2