[U.S. IPO] Lambda, Rival to CoreWeave, Prepares for IPO Following $1.5 Billion Nvidia Order

TradingKey - Lambda, a small AI cloud service provider, is reportedly gearing up for an initial public offering (IPO) and has enlisted investment banks such as Morgan Stanley, JPMorgan Chase, and Citibank for assistance. The IPO could launch as early as the first half of 2026.

Lambda provides hardware and services for AI hyperscalers, labs, and enterprises, generating revenue by leasing data center space. It is seen as a strong competitor to companies like CoreWeave and Alibaba Cloud.

Recently, Lambda received substantial backing from supplier Nvidia. This summer, Nvidia agreed to lease 10,000 GPU servers equipped with Nvidia AI chips from Lambda for four years, totaling $1.3 billion. Additionally, they struck a $200 million deal to lease 8,000 servers with Nvidia chips. Nvidia thus becomes Lambda's largest customer to date.

Apart from Nvidia, Lambda's major clients include Amazon and Microsoft, which contributed to half of the company’s nearly $114 million in cloud revenue during Q2.

Financial disclosures show that Lambda's revenue primarily comes from cloud services. In Q2, revenue grew nearly 60% to over $140 million, and first-half revenue increased 33% to more than $250 million, both exceeding company expectations.

In comparison, CoreWeave's Q2 revenue tripled year-over-year to $1.2 billion, making its business scale about ten times that of Lambda's. However, CoreWeave's losses are 20 times greater, with Lambda reporting a Q2 loss of roughly $16 million.

Lambda anticipates its cloud revenue will surpass $1 billion by 2026 and $20 billion by 2030, aiming to secure contracts with large AI developers like OpenAI, Google, Anthropic, and xAI.

Regarding infrastructure, Lambda expects its computational power to reach nearly 3GW (gigawatts) by 2030, equal to nearly half the total capacity of some of the largest cloud service providers today. However, in Q2 of this year, its capacity was only 47MW. Analysts suggest that post-IPO, the company may leverage debt to expand operations and achieve this growth.

In February, Lambda raised $480 million in a Series D funding round, bringing its valuation to $2.5 billion. Recent reports indicate the company is negotiating a new funding round, potentially raising its valuation to $4-5 billion, paving the way for its forthcoming IPO.

Compared to CoreWeave's target valuation of $35 billion during its IPO, Lambda lags far behind. However, analysts argue that this highlights Lambda's focus on niche AI infrastructure rather than broad cloud services, signifying a structural shift in the AI cloud domain—key to the company's differentiation.

Unlike other cloud service providers, Lambda focuses on accessibility, innovation, and the developer ecosystem, potentially carving out a unique market niche. This could serve as an excellent example of how upstart cloud services could disrupt traditional hyperscale cloud service providers.