Blackstone and Coatue are leading the round, which values the infrastructure provider at $14.5 billion.

Nvidia-backed cloud computing company Lambda is in the middle of what is planned to be its final funding round before an initial public offering (IPO), aiming to raise up to $4 billion, according to people familiar with the matter.

The new round values Lambda at $14.5 billion, excluding the capital being raised. The pre-IPO funding is being led by investment firms Blackstone and Coatue Management. Both companies have been very active in the artificial intelligence and data center industries in recent years.

A letter sent to the company's limited partners shows that Lambda management is targeting an IPO in 2027, depending on execution and market conditions. The letter shows that Lambda's backlog — the total value of orders not yet completed or delivered — grew from $15 billion in June of this year to $50 billion in September. A Lambda spokesperson declined to comment.

Since the spring, the company has been making a series of personnel changes that appear aimed at preparing for public market scrutiny. In May, Lambda replaced one of its co-founders and chief executive, Stephen Balaban, with veteran corporate executive Michel Combes. Combes previously served as chief executive of Brightspeed, SoftBank International, Sprint and Alcatel-Lucent. Balaban moved to the role of chief technology officer.

The company has also brought in more executive and board talent from the telecom industry, appointing AT&T chief executive John Donovan as a director and hiring Charles Fisher as chief financial officer. Fisher previously served as executive vice president of corporate finance and development at broadband service provider Charter Communications and as chief financial officer of car-sharing service Turo.

Lambda is one of a wave of so-called "neocloud" startups that have emerged in recent years. These digital infrastructure companies buy graphics processing units (GPUs) and other chips designed specifically for training and running large language models, then rent that computing power to customers who need it to develop or use AI tools.

Nvidia has been investing heavily in the neocloud industry, pouring billions of dollars into the sector. The market-leading chip designer holds roughly 10% stakes in both CoreWeave, which went public last year, and the Netherlands-based Nebius. Other neocloud companies Nvidia has invested in include Iren, Firmus and Nscale.

In February 2025, Nvidia participated in Lambda's $480 million Series D round. The company's most recent funding round took place last November, led by TWG Capital, backed by investors Mark Walter and Thomas Tull, raising a total of $1.5 billion. According to company announcements and valuation data from venture capital platform Forge Global, Lambda was valued at $5.9 billion after that round.

Lambda was founded in 2012 by twin brothers Stephen Balaban and Michael Balaban, both computer scientists trained at the University of Michigan. Lambda has long positioned itself as a cloud computing company run by engineers with a deep understanding of artificial intelligence technology.

Over the past year, neocloud companies have remained hot as more and more enterprises adopt enterprise-grade AI tools. Earlier this year, Stephen Balaban said Lambda has remained loyal to Nvidia's technology, with all of its chips and server racks coming from Nvidia.

The letter said Lambda's sharp backlog growth was mainly driven by a $35 billion commitment from Anthropic. Anthropic is the developer of the popular Claude series of models. At the end of August this year, it was reported that Anthropic had signed a $35 billion cloud computing agreement to rent Nvidia chips from Lambda. The chips are deployed at a facility in Nueces County, Texas, which Nvidia leases from bitcoin miner and data center developer Hut 8.