UK AI cloud firm Nscale plans NYSE IPO, with over 80% of orders from Microsoft and Anthropic

British cloud services provider Nscale has gone public, putting to the test how comfortable public market investors are with a company whose revenue depends heavily on just two major clients.

The company was spun off from Australian cryptocurrency mining firm Arkon Energy two years ago. According to filings with the U.S. Securities and Exchange Commission (SEC), Nscale holds a total contract backlog valued at over $103 billion. However, a significant risk looms: approximately 85% of that backlog comes from just two contracts — a $43.8 billion deal to supply computing power to Microsoft through 2033, and a $44.6 billion agreement with Anthropic.

Moreover, the Anthropic deal is subject to conditions: Nscale must secure financing. The prospectus explicitly characterizes certain milestones as stringent targets; if Nscale fails to meet them, the AI lab has the right to withdraw or even cancel the contract entirely.

Industry-Wide Concentration Risk

Nscale's client concentration risk reflects a broader trend of deep interdependence within the AI industry. The Financial Times cited a recent report from credit hedge fund Sona Asset Management, which noted that many AI infrastructure providers rely heavily on a small number of clients. Examples include:

• CoreWeave: 67% of revenue comes from Microsoft
• Applied Digital: 67% of revenue comes from Oracle, with an additional 30% from CoreWeave

Sona noted that such deep industry ties are not necessarily negative, but warned that a setback or strategic shift by a major player could easily ripple through the entire supply chain.

IPO Details and Financials

According to the Financial Times, Nscale plans to list on the New York Stock Exchange with an expected valuation of $35 billion. Bloomberg reported that the company aims to raise $3 billion through the IPO.

Financial results for the six months ending June 30 show:

• Revenue: $140.6 million, a sharp increase from $10.4 million in the same period last year
• Net loss: $1.02 billion, widening from $369 million a year earlier

Funding and Investors

Earlier this month, Nscale's key investor Nvidia agreed to provide $1 billion in convertible bonds, part of a total $3.1 billion financing plan. The startup previously completed a $2 billion Series C round led by Aker ASA and 8090 Industries, at a post-money valuation of $14.6 billion.

Competitors and Operations

Beyond CoreWeave, Nscale's competitors include Nebius, Lambda, and Crusoe. Crusoe last week announced it had raised $3.9 billion in funding and disclosed its corresponding post-money valuation.

Nscale operates data centers in Norway, Portugal, Texas, and West Virginia. Its board members include former Meta executives Sheryl Sandberg and Nick Clegg, as well as former OpenAI executive Fidji Simo.