Bowie was a big fan of the American art and underground scene where the Stooges and Velvet Underground flourished. Lou Reed and Iggy in particular were very important to him.

Iggy

The Stooges did not last long after the release of their second album. Their record company dropped them, their bassist Dave Alexander was fired because his alcoholism interfered with live gigs, and Iggy got deeper into heroin addiction.

An iteration of the Stooges with Iggy, the Asheton brothers, James Williamson and an ever changing bassist kept touring regardless. Iggy had a chance meeting with Bowie in New York, who convinced him to sign with Bowie's management company MainMan. Iggy moved to London and a reconfigured Stooges soon followed.

There, they recorded Raw Power, produced by Bowie. It had an infamously weird mix and didn't sell well. The Stooges split again soon afterwards and Iggy went on his solo career path, accompanying Bowie to Berlin and recording two solo albums there.

Lou

Lou Reed left the Velvet Underground in 1970 and after a period working with his father as a typist recorded a solo album. It didn't sell or rate well. He then met Bowie, who also signed him to MainMan and produced his new album, Transformer, released in 1972, the same year Bowie released the smash hit Ziggy Stardust album.

Transformer was a hit and allowed Reed to tour to significant crowds again, and gave him the boost to record new albums like Berlin.