back to article Lambda borrows half a billion bucks to grow its GPU cloud

Lambda Labs, operator of a GPU-infused cloud, on Thursday revealed it has secured a $500 million loan to fund the expansion of its accelerators-as-a-service offering. The deal – backed by Macquarie Group and Industrial Development Funding – will support the deployment of "tens of thousands" of Nvidia's fastest accelerators, …

  1. Anonymous Coward
    Anonymous Coward

    Vampire Kangaroo

    AI, $1/2bn of debt and Macquarie Group.

    What could possibly go wrong !!

    https://amp.theguardian.com/australia-news/2023/jul/28/vampire-kangaroo-macquarie-boss-defends-management-of-debt-ridden-thames-water

    Hopefully less shit than at Thames Water

    https://amp.theguardian.com/australia-news/2023/nov/19/australian-banks-in-6bn-share-buybacks-amid-wealth-transfer-from-customers-to-investors

    1. cyberdemon Silver badge
      Thumb Up

      Re: Vampire Kangaroo

      But next time post non-amp links please

      I personally find Brave's auto non-ampify feature very refreshing

      Other browsers/extensions are available

    2. anothercynic Silver badge

      Re: Vampire Kangaroo

      My thoughts exactly - "ooooooooeerr, Macquarie? That can only go south".

  2. rgjnk Bronze badge
    Flame

    'Secured'

    So they've borrowed and secured it against an immobile asset that will depreciate terribly and in short order will have little market beyond scrap. And that's assuming it all goes to plan & the AI bubble doesn't burst.

    Sounds a bit like mortgaging a burning house; there's either more to the deal or someone is looking to get burned.

    Or maybe it's on car loan terms and it's short term with big expensive repayments and (maybe) a supplier in the background helping to make it affordable...

    1. Lurko

      Re: 'Secured'

      The trick in high risk lending is to syndicate out or re-sell the debt to the gormless who think that "secured debt" is in fact secure. That's why various pension funds have money involved in the UK altnet sector, which is another dubiously solvent bubble that's starting to deflate.

      And let's not forget the cause of the 2008 financial meltdown, which was largely driven by years of unwise lending on a notionally secured basis.

      1. NeilPost

        Re: 'Secured'

        Rafactored out to suckers hoping to ‘make a killing on AI’.

        Like all bubbles … if these was good money to be made on it … institutional investors would have snaffled the lot up already and no crumbs for the poor man.

      2. cyberdemon Silver badge
        Holmes

        Re: UK altnet sector, which is another dubiously solvent bubble

        I assume by altnet sector you mean alternative networks i.e. small, fast ISPs with FTTP for very little money?

        I often wonder how my ISP toob can make any money at all on its offering of 900Mbps symmetric speeds, for £25/month, and a promise of no mid-contract price rises

    2. katrinab Silver badge
      Alert

      Re: 'Secured'

      8 of them for $27.92 per hour means $3.49 per GPU per hour.

      If they manage to rent them out 24 hours per day for 365 days, they get $30,572.40. In the following year, it is last year's model of GPU and they won't be able to charge so much for it.

      That means in the best-case scenario, they can maybe earn back the cost of the GPU, not the computer it was attached to, bandwidth, transaction fees, data centre running costs, maintenance, electricity, cooling, sales staff, advertising, loan interest, etc, etc.

      I would be expecting to see full investment pay-back at the end of year 1, then whatever you get in future years is profit.

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