<figure>

<source type="image/webp" />

<button class="pencraft pc-reset pencraft icon-container restack-image" tabindex="0" type="button"><svg fill="none" height="20" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" stroke-width="1.5" style="height: 20px; width: 20px;" viewBox="0 0 20 20" width="20" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button class="pencraft pc-reset pencraft icon-container view-image" tabindex="0" type="button"><svg class="lucide lucide-maximize2 lucide-maximize-2" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button>

<figcaption class="image-caption">Lambda CEO Stephen Balaban (middle) at Cerebral Valley New York </figcaption></figure>

The tech industry, much like the broader economy, is difficult to read right now.

On one hand, AI euphoria continues unabated with hundreds of billions of dollars pledged to startups whose combined valuations now stretch past one trillion.

On the other, public markets have been less forgiving. Over the past few months, many tech stocks have moved from drifting sideways to taking a beating outright.

The tension has made 2026 — once penciled in as a banner year for IPOs — look increasingly unfriendly to companies looking to exit onto the public markets. Companies can still squeeze through the IPO window, but most would be landing in a briar patch.

One sector that’s flashing warning signs is the AI cloud, or neocloud, sector.

After a promising start to the year, public investors have turned on these stocks in a big way, worried about their mounting debt and missed deadlines for data center buildouts.

• CoreWeave is down 50% in the last 6 months.

• Oracle — which once posted a 36% one day gain after it announced hundreds of billions in forthcoming AI contracts (mostly from OpenAI) — has given all that back and then some. Oracle is down 4% in the last 6 months and 36% since mid October.

<figure>

<source type="image/webp" />

<button class="pencraft pc-reset pencraft icon-container restack-image" tabindex="0" type="button"><svg fill="none" height="20" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" stroke-width="1.5" style="height: 20px; width: 20px;" viewBox="0 0 20 20" width="20" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button class="pencraft pc-reset pencraft icon-container view-image" tabindex="0" type="button"><svg class="lucide lucide-maximize2 lucide-maximize-2" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button>

</figure>

All of that is very bad news for the remaining private neoclouds who had hoped to go public next year.

• Lambda, fresh off announcing a $1.5 billion Series E in November, is currently looking to raise another funding round, according to two people familiar with the matter. The company is seeking to bring in hundreds of millions of dollars in an unpriced mezzanine round that would convert into equity at a discount to its eventual IPO valuation, which is planned for next year, one of the people said. The Information previously reported that Lambda has hired bankers for an IPO in 2026. Lambda declined to comment through a spokeswoman.

Read more