According to sources familiar with the matter, Lambda, a cloud computing infrastructure company backed by NVIDIA (NVDA.US), is negotiating a new funding round with investors that could value the company at $4-5 billion, paving the way for a subsequent initial public offering (IPO). The California-based company could potentially go public as early as the end of this year and has already initiated preliminary discussions with multiple investment banks regarding IPO underwriting services. Sources indicate the funding round could raise hundreds of millions of dollars.

According to financial data provider PitchBook, Lambda raised $480 million in its Series D funding round completed in February this year, achieving a valuation of $2.5 billion. The round was led by Andra Capital and SGW, the family office of early Google (GOOGL.US) investor Scott Hassan, with participation from OpenAI co-founder Andrej Karpathy, Cathie Wood's ARK Invest, NVIDIA, and other institutional and individual investors.

Should Lambda proceed with an IPO shortly after this funding round, it would capitalize on the current market enthusiasm for artificial intelligence (AI) cloud computing. Previously, cloud computing provider CoreWeave Inc. (CRWV.US) went public at the end of March, with its stock price more than doubling since the offering. The Livingston, New Jersey-based company, as a key NVIDIA partner, has attracted significant attention from fund managers seeking exposure to AI cloud infrastructure.

According to Lambda's website, the company, founded in 2012, has deployed over one million NVIDIA graphics processing units (GPUs) across data centers in Atlanta, Los Angeles, Chicago, and Austin, with offices in San Jose and San Francisco. The February funding was primarily used to expand Lambda's cloud platform, bringing the company's total funding raised to over $860 million.

Notably, Bloomberg Beta, the venture capital arm of Bloomberg LP, is also an investor in Lambda.

Sources emphasized that the funding and IPO plans remain under discussion, with specific terms subject to change. These individuals requested anonymity due to the confidential nature of the matter. A Lambda spokesperson declined to comment on market speculation.