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AI compute provider Nscale is looking for $3.5B in pre-IPO financing
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- DeepHorus
British AI infrastructure provider Nscale is making a bold pre-IPO move, seeking a massive $3.5 billion in financing. This comes as the company, founded just two years ago, reportedly plans to go public as early as later this month. The capital raise is split into two parts: a $1.5 billion convertible note sale and an additional $2 billion in financing from tech giant Nvidia. The convertible notes are a type of debt that can be converted into company stock at a future date.
This aggressive funding push follows Nscale's previous rapid growth. In March, the company closed a $1.1 billion Series B round, which it hailed as the largest in European history, led by investment fund Aker. Nvidia was also a key participant in that round. Prior to that, Nscale raised $155 million in its Series A round in December 2024.
The backdrop for this activity is the explosive growth in AI infrastructure, where compute power has become a critical competitive resource. Nscale has secured a landmark contract with AI company Anthropic, a deal reportedly worth approximately $45 billion. This single contract is central to the company's valuation pitch to investors.
According to reports, Nscale has been informing potential investors that it projects approximately $103 billion in revenue. It is important to note that this figure is not based on current sales but is a projection derived from signed customer leases. This long-term contractual value forms the foundation of its financial narrative ahead of the IPO.
The involvement of Nvidia, a dominant force in AI chips, lends significant credibility to Nscale's operation. The deep financial ties, with Nvidia investing in both the Series B and now this potential $2 billion pre-IPO round, signal a strategic partnership beyond simple investment. This relationship underscores the importance of integrated AI infrastructure providers in the broader AI ecosystem.
As Nscale prepares for its potential public market debut, its ability to secure such substantial pre-IPO financing will be closely watched. The outcome of this funding round and the subsequent IPO performance will serve as a key indicator of investor appetite for high-growth, capital-intensive AI infrastructure companies. The coming weeks will reveal whether Nscale's ambitious projections can translate into sustained market confidence.
