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Private debt is now a primary financing channel for the AI infrastructure cycle. Neocloud Lambda has raised $1 billion in private debt to purchase Nvidia AI chips, which it will lease to Microsoft.
The transaction is the latest in a string of similar loans the company has completed, and together they illustrate the capital intensity the AI build-out demands.
Lambda borrows, acquires Nvidia hardware, and delivers compute capacity to Microsoft under a lease. Lambda's balance sheet carries the debt, not the customer's.
That structure gives Microsoft access to AI compute without owning the underlying hardware, while Lambda holds the contracted lease income to service the loan.
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