Lambda is borrowing $917m to buy chips from the company that invests in it
Lambda is selling a $917 million leveraged loan to finance a chip purchase, Bloomberg reported on Monday. Jeannine Amodeo, Paula Seligson and Gowri Gurumurthy broke the story. The money pays for GPUs and other infrastructure as part of a contract with Nvidia, according to a person with knowledge of the matter. Morgan Stanley leads the transaction.
Lambda Compute II LLC and Lambda Cloud Canada Inc will issue the debt. A lender call opened at 10:30am New York time on Monday. Commitments fall due on Thursday. Order books had reached nearly $2 billion after a pre-marketing effort.
Bloomberg frames the risky debt market as a new front in the borrowing binge funding the AI buildout. Its own compiled data puts global AI-linked borrowing at nearly $600 billion since last year. Lambda belongs to the group of firms known as neoclouds, which rent out access to microchips and other AI infrastructure.
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