Lambda raises $1B in debt to buy more Nvidia chips for Microsoft

Lambda, an AI cloud company that buys computing chips and rents them out to businesses, has raised $1 billion in private, short-dated debt to purchase Nvidia’s AI chips, which it will lease to Microsoft, according to a Bloomberg report. Bloomberg says the deal was arranged by JP Morgan Chase.

The debt’s terms suggest Lambda expects to deploy the chips quickly and start generating revenue from them almost immediately, letting it repay the debt fairly quickly using that incoming cash.

This is the latest in a string of loans Lambda has used to fund GPU infrastructure for specific customers. In May, it closed a $1 billion secured credit facility. This week, it announced the closing of a separate $926 million loan to fund Nvidia GB300 GPUs — one of Nvidia’s newest chip models — for a deployment it is under contract to provide Nvidia.

The new $1 billion private debt deal comes as Lambda is reportedly in talks for a $3 billion pre-IPO round. The company raised $1.5 billion in venture capital last November at a $5.43 billion post-money valuation, per PitchBook data.

Lambda isn’t the only one relying on debt to fund the AI boom: according to data Bloomberg compiled, banks and tech companies have raised over $400 billion in AI-related debt globally in 2026 so far.

Why it matters

The debt-financed buildout shows how AI infrastructure providers increasingly lean on short-term, asset-backed loans rather than equity to keep pace with GPU demand — a structure that works only as long as customer contracts and chip deployment stay on schedule.