Lambda, an AI cloud computing startup, is reportedly raising up to $4 billion in its final private funding round ahead of a planned initial public offering.
The round would value Lambda at $14.5 billion before the new investment, The Wall Street Journal reported Tuesday, citing people familiar with the matter. Blackstone and Coatue Management are said to be leading the round.
Bloomberg reported in August that Lambda was seeking up to $3 billion at a valuation of at least $12 billion, meaning the latest reported talks involve a larger round and a higher valuation.
Lambda is targeting an IPO in 2027, according to a letter sent to the company's limited partners and reviewed by the WSJ. The timing remains subject to the startup's execution and market conditions.
Founded in 2012 by twin brothers Stephen and Michael Balaban, Lambda rents access to Nvidia chips and other computing infrastructure for building and running AI models. The startup had raised more than $2.36 billion in equity before the latest talks. This included about $4 million in early seed funding, a $15 million Series A, a $44 million Series B, a $320 million Series C, a $480 million Series D and more than $1.5 billion in Series E funding.
Lambda did not disclose its valuation after the Series E round in November 2025. Forge Global, a marketplace for trading shares in private companies, estimated that the round valued Lambda at $5.9 billion after the investment.
As for Nvidia, it participated in Lambda's Series D round in February 2025. Lambda has also raised several large debt facilities to fund its infrastructure expansion. It closed a $1 billion credit facility in May, followed by a $926 million term loan in August and another $1 billion in secured financing in October.
Lambda's backlog, which includes contracted orders that have not yet been delivered, increased from $15 billion in June to $50 billion in September, according to the letter cited by the WSJ. The increase appears to be mainly driven by a $35 billion cloud agreement that Anthropic signed with Lambda in late August.
Lambda also changed its leadership in May ahead of an IPO, appointing Michel Combes as CEO. Combes previously led Brightspeed, SoftBank International, Sprint and Alcatel-Lucent.
Co-founder and former CEO Stephen Balaban moved to chief technology officer, while fellow co-founder Michael Balaban became chief product officer.
Lambda also appointed former AT&T Communications CEO John Donovan as board chairman and hired Charles Fisher as chief financial officer. Fisher previously served as finance chief of car-sharing company Turo and held a senior finance role at U.S. broadband provider Charter Communications.