NVIDIA leases GPUs back from Lambda in $1.5 billion arrangement.

Nvidia has agreed to a $1.5 billion contract to lease GPU servers from Lambda, an AI infrastructure company, according to a report by The Information. The agreement covers a $1.3 billion, four-year lease for 10,000 servers, plus a $200 million contract for 8,000 additional servers, bringing the total to 18,000 servers. Nvidia, already an investor in Lambda, becomes its largest customer under the arrangement.

The move underscores the ongoing shortage of advanced AI chips, forcing even Nvidia to rent back its own hardware to secure access for cloud operations. By leasing from smaller providers like Lambda, Nvidia is supporting companies competing with hyperscale players Amazon, Microsoft, and Google. The chipmaker has pursued a similar strategy with other firms, previously backing CoreWeave as part of a broader initiative to diversify AI compute supply.

Lambda is positioning itself as a significant alternative for AI developers seeking access to GPUs, with the company projecting its cloud revenues could surpass $1 billion by 2026. The Lambda deal strengthens its profile as it prepares for a public listing. Lambda has reportedly hired Morgan Stanley, J.P. Morgan, and Citi for an IPO that could happen as early as the first half of 2026.

Nvidia's reliance on major customers underscores the concentrated nature of AI chip demand. Nearly 40% of Nvidia's revenue in the second quarter came from just two customers, with one customer (Customer A) representing 23% of revenue and another (Customer B) accounting for 16%. For the first half of its fiscal year, these two customers contributed 20% and 15% of total revenue respectively, while four additional customers made up 14%, 11%, 11%, and 10% of second quarter revenue. The chipmaker reported record revenue of $46.7 billion for the quarter ending July 27, a 56% increase from the previous year, fueled by surging demand for AI data center hardware.