AI Cloud Provider Lambda in Talks for $350 Million Pre-IPO Funding Round

Lambda Seeks $350 Million in Pre-IPO Funding, Led by Mubadala Capital

January 9, 2026

AI cloud infrastructure provider Lambda is in advanced discussions to secure a significant $350 million funding round ahead of a potential public listing later this year, according to a report from The Information. The move underscores the intense investor appetite for companies positioned at the intersection of artificial intelligence and high-performance computing.

The report indicates that Mubadala Capital, the asset management arm of the Abu Dhabi sovereign wealth fund, is in talks to lead the substantial pre-IPO round. This potential investment follows a period of explosive growth for the company, which saw its revenue nearly double in the first half of 2025, surpassing internal forecasts.

This new funding effort comes on the heels of a massive $1.5 billion Series E round led by TWG Global in November 2025. Prior to that, a $480 million Series D round in February 2025, led by Andra Capital and SGW, had valued the company at approximately $2.5 billion. The capital is fueling Lambda's expansion as it capitalizes on soaring demand for GPU-powered cloud capacity. The company, founded in 2012, currently operates from 15 data centers across the United States and recently announced a new GPU cluster deployment at Prime's LAX01 facility in California.

Lambda's strategic importance has been highlighted by major commercial deals with industry titans. In late 2025, it signed a multi-billion-dollar contract to provide Microsoft with access to its GPU clusters. Furthermore, a reported $1.5 billion lease-back agreement with Nvidia in September would see the chipmaker utilizing Lambda's cloud capacity, which is itself powered by Nvidia's hardware.

The company is now targeting an initial public offering in the second half of 2026, a timeline slightly later than earlier market speculation which pointed to the first half of the year. In preparation, Lambda had reportedly engaged investment banks Morgan Stanley, J.P. Morgan, and Citi in September 2025.

This potential funding round and impending IPO signal a maturing phase for specialized AI cloud providers. As enterprises and hyperscalers scramble for scarce GPU resources, companies like Lambda that have secured hardware and built scalable infrastructure are becoming critical, high-value players in the digital economy's next wave.

Source: datacenterdynamics