According to reports, Lambda secures a $500 million loan from lenders including Macquarie Group with Nvidia's much-coveted chips as collateral.

Private investors are flocking to start-ups that cater to the colossal demand for chips and software capable of accommodating AI's intricate computing requirements.

As the AI market gets more and more competitive, firms are battling to develop their own generative AI solutions.

A shortage of fast artificial intelligence chips with millions of transistors has made graphics processing units like those offered by industry leader Nvidia a sought-after possession.

The so-called "special purpose GPU financing vehicle," under which Lambda has secured funds, is an asset-based structure secured by GPUs and supported by their cash flow generation, according to the company. A company's assets are used as collateral for asset-based financing.

“Lambda will use the funding to dramatically scale its GPU Cloud, featuring NVIDIA H100s,” the company says.
The cash will also be used to acquire Nvidia's H200 chips and its most recent Blackwell AI chips, including B200 and GB200.

Last year, Nvidia announced that Lambda would be one of the first cloud service companies to provide access to its H200 chips.

The loan also involved a financial adviser called Industrial Development Funding, and comes after the $320 million funding round led by billionaire Thomas Tull's US Innovative Technology in February.

"Lazard served as exclusive financial adviser and placement agent to Lambda on this transaction," the company says.