AI cloud infrastructure provider Lambda is reportedly in talks to raise as much as US$ 3 billion in a funding round ahead of a potential initial public offering (IPO) launching as soon as 2027.
According to a report from Bloomberg citing sources familiar with the matter, Lambda has already received multiple term sheets for the round and is in discussions to close the round at a valuation of US$ 12 billion or more. Talks are ongoing and deal terms have yet to be finalized. Lambda has not officially confirmed any IPO plans.
The talk of a Lambda IPO aligns with increased demand for AI and the technology it runs on. Investors are looking for pathways to back AI infrastructure bandwagon and an IPO from a provider such as Lambda gives them exactly that.
Earlier this month, Lambda announced it had priced a US$ 926 million senior secured term loan B facility to support committed customer deployments and expansion of its GPU cloud platform.
“This transaction will establish Lambda as the first private neocloud to access the term loan B market with an investment-grade rating. The significant pricing and investor interest we generated reflect the strength of our customer commitments, the quality of our infrastructure and growing institutional conviction in AI infrastructure as an asset class,” Michel Combes, Lambda Chief Executive Officer, said earlier this month.
In November 2025, Lambda closed its Series E funding round after raising more than US$ 1.5 billion from investors championed by TWG Global, a holding company led by billionaires Thomas Tull and Mark Walter, with additional participation from Tull’s US Innovative Technology Fund.
The company’s Chief Executive Officer at the time and Co-Founder, Stephen Balaban, said that the funding allowed Lambda to pursue its mission of making compute as ubiquitous as electricity.
“This round of funding helps enable Lambda to develop gigawatt-scale AI factories that power services used by hundreds of millions of people every day,” Balaban said in November.
The activity builds on a bumper year for IPOs in 2025 with EY reporting that 1,293 IPOs raised US$ 171.8 billion, a 39 percent increase in proceeds compared to 2024. India emerged as the most active single market, registering 367 IPOs in the year. The firm noted at the time that 2026 was shaping up to be another pivotal year for the global markets as we’re seeing.
In line with that, 2026 has seen a flurry of IPOs being prepared or launched. This month reports have suggested that Singapore-based DayOne is preparing an IPO in the US. DeepSeek, the Chinese AI developer, is also in the midst of a funding round said to be in preparation for an onshore IPO.
While Lambda wouldn’t be the first neocloud to launch an IPO, CoreWeave launched in 2025, it comes into a lukewarm market with several analysts anticipating that AI demand will cool. How Lambda’s IPO, if it is indeed launched, may serve as the canary in the coal mine to see if the analysts are correct.