Neocloud Lambda, an AI cloud company renting out computing chips to businesses, has secured $1 billion in private short-dated debt to buy Nvidia’s advanced AI chips. This funding will enable Lambda to lease the chips to Microsoft, with the aim of generating revenue fast enough to repay the debt. The deal is part of a series of loans Lambda is using to fund specific customer GPU infrastructure, including a recent $926 million loan for Nvidia’s GB300 GPUs.

This move comes as Lambda considers a $3 billion pre-IPO round, following its recent $1.5 billion venture capital raise in November at a valuation of $5.43 billion. Neocloud Lambda is not alone in its reliance on debt to capitalise on the AI boom; data compiled by Bloomberg shows banks and tech companies have raised over $400 billion in AI-related debt globally in 2026 so far.

The company's strategy reflects a growing trend among tech firms to leverage debt to accelerate growth and compete in the highly competitive AI market. As AI becomes more integral to business operations, the financial strategies of tech companies like Lambda will continue to shape the future of cloud computing.