Lambda said to be working with Morgan Stanley, J.P. Morgan, and Citi
AI cloud provider Lambda is reportedly preparing for an initial public offering (IPO).
As reported by The Information and citing people with "direct knowledge of the talks," the Nvidia-based cloud company has hired Morgan Stanley, J.P. Morgan, and Citi to prepare for its IPO.
The company is said to be aiming for a listing in the first half of 2026, following a near doubling of cloud revenue in its first half of 2025.
San Francisco-based Lambda saw revenue grow almost 60 percent year over year to $140 million in its second quarter, reports The Information, citing documents viewed. The first half rose 33 percent to more than $250m. The documents stated that this surpassed Lambda's internal expectations.
Additionally, the gross margin for this year so far was 50 percent. Excluding its older non-cloud businesses, margin was 61 percent. Net loss in the first half was around $24 million.
In February 2025, Lambda raised $480m in a Series D round, led by Andra Capital and SGW. That round valued the company at $2.5 billion. According to The Information report, the AI cloud was also in talks with investors for a $500m round last month that would value Lambda between $4-5bn. In total, the company has raised $1.65bn in debt and equity financing to date, according to PitchBook.
The investment banks and Lambda declined to comment to The Information.
The pursuit of an IPO follows competitor CoreWeave's own listing earlier this year.
CoreWeave began trading on the Nasdaq stock market on March 28, 2025, offering 36.59 million shares at $40 each - potentially raising almost $1.5bn.
Since the IPO, CoreWeave has continued to grow dramatically. Its first quarterly report following the listing saw the company posting revenue of $971.63m, up 420 percent YoY from $188.6m, while adjusted Ebitda was $606.13m, up 480 percent YoY, and with a 62 percent margin.
In its most recent quarter, CoreWeave has continued to grow, posting revenues of $1.2bn, up 207 percent year over year (YoY) and an increase on the previous quarter's $971.63m. Meanwhile, the company has raised its full-year revenue guidance to $5.15-$5.35bn, up from $4.9-$5.1bn.
Going public enables companies to unlock more bank capital, and also to provide financing with better terms, as deposit costs are low. With the AI cloud business model being extremely capital-intensive - due to costs associated with data centers and the IT hardware necessary - many AI cloud providers are operating with a lot of debt.
Source: DCD
