Nvidia-backed AI cloud firm Nscale files for US IPO at up to $35 billion valuation

AI cloud services provider Nscale has filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC), formally initiating its initial public offering (IPO) process. The company plans to list on the New York Stock Exchange.

IPO Details

• Target valuation: Up to $35 billion (approximately RMB 235 billion)
• Fundraising target: Up to $3 billion (approximately RMB 20.1 billion)

Company Overview

Headquartered in London, Nscale was spun off from Arkon Energy in 2024. Founder and CEO Josh Payne believes the AI large model boom is creating transformative opportunities in the computing industry. The company has developed a unique "power to token" business model, aiming to integrate the full value chain—from electricity resources and data centers to GPU hardware, cloud computing, and model inference.

Nscale's operations are divided into two segments:

• Nscale Infrastructure
• Nscale Cloud

The company builds its core competitive advantage on low-cost renewable energy sources, including Norwegian hydropower and Icelandic geothermal energy.

Investor Interest and Shareholder Structure

Capital markets have shown strong enthusiasm for Nscale. In March 2026, the company completed a $2 billion Series C funding round at a post-money valuation of $14.6 billion.

• Largest external shareholder: Norwegian industrial investment group Aker ASA, holding approximately 23.9% after multiple capital increases.

Nvidia's Triple Role

Nvidia plays a critical role as supplier, customer, and investor:

• Supplies GPU hardware
• Has signed large-scale computing lease agreements
• Invested approximately $3.1 billion (including $2.1 billion in convertible bonds and $1 billion in equity)

The prospectus does not disclose Nvidia's exact shareholding percentage. Nvidia CEO Jensen Huang described Nscale as having the potential to become "the national champion of UK AI infrastructure."

Other notable investors include Dell, Nokia Capital, and Fidelity Investments.

Business Performance

Rapid growth reflects surging demand for AI computing power:

| Metric | Value | |--------|-------| | H1 2026 revenue | $140.6 million (up 1,252% year-over-year) | | Active GPUs (as of Aug 31) | ~25,000 | | Total GPUs in use or under contract | 461,000 | | Operational data centers | 5 | | Data centers under construction | 12 | | Controlled power resources | Over 10 GW | | Total contracted orders | $103 billion |

In February 2026, ABI Research ranked Nscale first among 14 global AI cloud service providers.

Financial Challenges

Despite rapid expansion, the company faces persistent losses due to its "spend-for-growth" model:

• H1 2026 net loss: $1.0201 billion (up 176% year-over-year)
• FY 2025 net loss: $761.8 million
• FY 2024 net loss: $78.2 million

The prospectus includes risk disclosures noting that some large customer contracts include pre-financing conditions. If data center construction funding falls short, related contracts may be at risk of termination.

Key Customers and Strategic Moves

Microsoft and Anthropic are Nscale's two core customers, together accounting for 85% of total contract value. Long-term computing agreements provide stable future revenue expectations.

To address software capability gaps, Nscale acquired AI software startup Anyscale in July for $1.65 billion, moving toward a full-stack, integrated hardware-software service model. The company is also expanding into emerging AI applications such as robotics and autonomous driving, and has established a presence in Indonesia to tap into the Southeast Asian computing market.

Competitive Landscape

Nscale faces intense competition in the computing power sector, including from listed companies such as:

• CoreWeave (CRWV.O, market cap ~$48.3 billion)
• Nebius (NBIS.O, market cap ~$64.5 billion)

Traditional cloud giants like Amazon and Microsoft are also increasing their computing infrastructure investments, intensifying industry competition. As global AI computing supply becomes more abundant and AI model efficiency continues to improve, computing leasing companies may face declining pricing power and margin pressure. Whether Nscale can develop a second growth curve through software services remains a key question post-IPO.

Industry Perspective

Industry analysts view Nscale's IPO as a representative example of the global AI computing infrastructure boom. While AI's rigid demand for computing power creates enormous market opportunities, the capital-intensive, asset-heavy nature of the business places stringent demands on financial strength, project execution capabilities, and customer risk management. This race—from electricity to AI services—is expected to reshape the global AI computing industry landscape over the next decade.

Source: Securities Times