Lambda Secures $500M Loan Using Nvidia Chips as Collateral to Scale GPU Cloud

Lambda has secured a $500 million loan from lenders including Macquarie Group (MQG.AX), Nvidia's (NVDA.O), using Nvidia's much sought-after chips as collateral, the artificial intelligence cloud provider said on Thursday.

Startups addressing the significant need for chips and software that can support AI's complex computing requirements have been attracting private investors.

Companies across various industries have been seeking to develop their own generative AI (genAI) offerings as they look to gain market share in the increasingly competitive AI market. This has increased the value of high-performance AI chips with millions of transistors and exacerbated their shortage, making graphics processing units (GPUs) such as those offered by industry leader Nvidia a highly desirable asset.

The so-called "special purpose GPU financing vehicle", under which Lambda has secured funds, uses an asset-based structure secured by GPUs and supported by their revenue generation, the company said. Asset-based financing involves lenders providing funds secured against a company's assets. "Lambda will use the funding to substantially scale its GPU Cloud, featuring NVIDIA H100s," the company said.

The financing will also be used to procure Nvidia's H200 chips as well as its latest Blackwell AI chips including B200 and GB200.

Nvidia CEO Jensen Huang had stated in March that the B200 AI chip will be priced between $30,000 to $40,000.

Nvidia had said in November last year that Lambda will be among one of the first cloud service providers to offer access to its H200 chips. The loan also involved investment adviser Industrial Development Funding and follows the $320 million funding round led by billionaire Thomas Tull's US Innovative Technology in February.

Lazard served as the exclusive financial advisor and placement agent for Lambda on this transaction, the company said.​