AI Infrastructure Startup Nscale Pursues $3.5B Pre-IPO Financing Backed by $103B in Contracts

Nscale Targets $3.5 Billion Pre-IPO Financing Ahead of New York Listing

Nscale, a two-year-old British AI infrastructure company, is pursuing up to $3.5 billion in pre-IPO financing as it prepares for a potential New York stock listing later this month1

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. The AI compute provider is seeking $1.5 billion in convertible notes led by Daniel Loeb's hedge fund Third Point, with Goldman Sachs managing the process2

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. An additional $2 billion would come directly from Nvidia, the chip manufacturer whose processors power Nscale's data center operations1

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. The convertible notes are priced at a double-digit discount to the IPO valuation, with that discount narrowing as valuation increases and stopping at $30 billion2

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. This valuation represents roughly double the $14.6 billion figure from Nscale's March Series C round4

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Nvidia's Dual Role Creates Circular Financing Structure

Nvidia's $2 billion investment positions the chip manufacturer as both supplier and major shareholder in the AI cloud infrastructure startup4

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. The Nvidia-backed AI startup has ordered approximately 194,000 Vera Rubin GPUs for its data centers, meaning Nvidia is effectively financing a buyer of its own chips2

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. This arrangement mirrors Nvidia's earlier approach with CoreWeave, where the chipmaker took an equity stake and placed a $250 million anchor order inside that company's 2025 IPO4

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. Critics have labeled such structures circular financing, as revenue Nscale books from renting computing power flows partly from cash Nvidia supplied initially4

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. Nvidia also participated in Nscale's $1.1 billion Series B round in March, which the AI cloud computing startup hailed as the largest Series B in European history1

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$103 Billion Contracted Revenue Doubles in Single Month

Nscale is briefing investors that its contracted revenue totals approximately $103 billion, roughly double the $51 billion figure reported just one month earlier2

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. Almost all of that increase stems from a single $45 billion deal signed with Anthropic on August 262

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. Under this agreement, Anthropic will lease roughly 460 megawatts of computing power from Nscale's West Virginia data center campus, with the facility expected to come online at the end of 20273

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. The AI infrastructure startup will deploy Nvidia's Vera Rubin chips to support Anthropic's computing needs3

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. Nscale's contracts average 5.7 years in length, implying annual revenue of approximately $18.1 billion with adjusted earnings around $13.6 billion, though the company calls these figures illustrative rather than formal guidance2

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Microsoft and Google Passed on Anthropic Deal Before Nscale

The $45 billion Anthropic contract that now anchors Nscale's valuation was initially offered to larger cloud computing players who declined2

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. Microsoft walked away during a review of its data center portfolio over the summer, while Google passed after examining its own capital spending plans2

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. This history raises questions about why two of the world's best-capitalized cloud companies considered and rejected the same capacity that now serves as the centerpiece of Nscale's pitch to public market investors4

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. The AI cloud contender's actual revenue reached just over $100 million in the second quarter of 2026, up from approximately $37 million the previous quarter4

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. For context, Nscale booked roughly $33 million of revenue across the entire year of 20252

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High-Profile Board Members and European Funding Complement US Listing Plans

Nscale's board includes former Meta executives Sheryl Sandberg and Nick Clegg, the former UK deputy prime minister, adding political and industry weight ahead of the planned US listing2

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. The AI infrastructure startup's European operations run on European financing, with the Narvik project in northern Norway drawing $790 million in committed debt from ABN AMRO, DNB, Nordea, SEB, and Eksfin, Norway's state export finance agency2

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. That site leverages cold air and Nordic hydropower, with Microsoft as the customer2

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. The IPO could raise another $3 billion on top of the private financing, with deliberations continuing and the size and investors potentially changing before final decisions are made4

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. AI infrastructure startups have seen immense growth amid the current AI boom, where computing power has become competitive currency1

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