Lambda is borrowing $917m to buy chips from its investor

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.

The circle closes on itself

Start with who sits on the other side of the contract. Nvidia already held an investment in Lambda. It also supplies every chip Lambda runs, because the company uses Nvidia silicon exclusively.

Then it went further. In September 2025 Nvidia agreed to lease GPUs back from Lambda, in a $1.3bn four-year deal covering 10,000 servers plus a $200m contract for 8,000 more. RCR Wireless reported that the arrangement made Nvidia its largest customer, worth roughly $1.5bn across 18,000 servers.

So Nvidia plays four roles at once. Investor,…