Lambda Issues $917 Million Loan for GPU Procurement and AI Infrastructure Construction

August 11, according to Bloomberg, Nvidia-backed AI cloud computing service provider Lambda is seeking a $917 million leveraged loan to finance a chip procurement transaction related to Nvidia. The funds will be used to purchase and install GPUs and other infrastructure. Sources said that prior to the official marketing, the subscription intention for this loan had already reached nearly $2 billion.

Lambda is part of the "Neocloud" company that provides AI chip and infrastructure leasing services. This financing continues the trend of AI infrastructure companies financing GPU purchases through the debt market. Bloomberg data shows that the global debt raised for AI expansion has reached close to $600 billion since last year. CoreWeave had previously also secured financing through the institutional leveraged loan market, with customer contracts and chip-related assets as collateral.

The Lambda loan is planned to be priced at a maximum of 3.75 percentage points above the benchmark rate, with an issue price of approximately 99% of face value. The loan has a term of 4.4 years, significantly shorter than the typical institutional loan term of about 7 years, and uses a fully amortizing structure, allowing the debt to be gradually repaid over about 4 years, thereby reducing the refinancing risk for lenders. If Lambda redeems the loan early, a penalty will be incurred.

Morgan Stanley led the transaction, and the loan was issued by Lambda Compute II LLC and Lambda Cloud Canada Inc. Lambda currently operates mainly in North America and only uses Nvidia chips; in addition to relying on third-party facilities, the company is also beginning to build its own data centers and has had preliminary discussions with banks regarding a potential IPO.