Lambda will use the funding to dramatically scale its GPU Cloud, featuring NVIDIA H100s, the firm said

Lambda has secured a $500 million loan from lenders including Macquarie Group with Nvidia’s much-coveted chips as collateral, the specialty AI cloud provider said on Thursday.

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

Companies across the board have been vying to develop their own generative AI (genAI) offerings as they look to capture a share of the increasingly competitive artificial intelligence market.

This has added to the attraction of fast AI chips with millions of transistors and their subsequent shortage, making graphics processing units (GPUs) such as those offered by industry leader Nvidia a prized possession.

The so-called “special purpose GPU financing vehicle”, under which Lambda has secured funds, is an asset-based structure secured by GPUs and supported by their cash flow generation, the firm said. Asset-based financing involves lenders providing funds against a firm’s assets as collateral.

Lambda will use the funding to dramatically scale its GPU Cloud, featuring NVIDIA H100s, the firm said.

The financing will also be used to purchase Nvidia’s H200 chips as well as its latest Blackwell artificial intelligence chips including B200 and GB200.

The B200 AI chip will be priced between $30,000 and $40,000, Nvidia Chief Executive Officer Jensen Huang had told CNBC in March.

Nvidia had said in November last year that Lambda will be among one of the first cloud service firms to provide 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.