Nscale Seeks $3.5 Billion Pre-IPO Funding
AI cloud infrastructure provider Nscale is in talks to raise about $3.5 billion before a planned initial public offering. The company is seeking the funding from a mix of investors and strategic partners, according to people familiar with the discussions.
The proposed financing would include up to $1.5 billion through convertible notes. Meanwhile, Nscale aims to secure about $2 billion from Nvidia. Goldman Sachs is working on the fundraising, while Third Point is expected to lead the convertible note investment.
However, the discussions remain ongoing. Therefore, the final investment amount and participating investors could still change.
Nscale Targets Major Pre-IPO Funding
Nscale plans to offer the convertible notes at a double-digit discount to its eventual IPO price. In addition, the conversion terms would apply up to a $30 billion valuation. Above that level, the conversion price would remain unchanged, according to people familiar with the deal.
The financing comes as Nscale prepares for a potential public listing. Furthermore, Bloomberg previously reported that the IPO could raise another $3 billion.
Nscale has also been presenting investors with significant contracted business. According to Bloomberg, the company says its total contract value stands at about $103 billion. That figure includes a major agreement with Anthropic for AI computing capacity.
In August, Anthropic agreed to rent AI computing capacity from Nscale’s West Virginia data center campus for six years. The deal is reported to be valued at $45 billion.
AI Infrastructure Drives Expansion
Nscale’s latest fundraising effort reflects the growing capital requirements of AI infrastructure. Data center operators increasingly need substantial funding for GPUs, facilities, and power capacity.
At the same time, Nscale is expanding beyond its work with AI model companies. The company recently agreed to provide at least $3.5 billion of computing capacity to robotics startup Figure. Nscale also invested in Figure as part of the agreement.
Furthermore, Nscale agreed in July to acquire AI software company Anyscale for $1.65 billion. The acquisition would expand its software capabilities alongside its infrastructure business.
Nscale is also developing a large data center campus in Norway for Microsoft. Meanwhile, its West Virginia campus supports its growing AI computing operations.
Valuation Has Risen Sharply
Nscale was valued at $14.6 billion in March after raising $2 billion in a Series C funding round. Consequently, the proposed financing could establish a much higher valuation range ahead of its IPO.
The company was founded in 2024 and operates data centers, GPUs and its own software stack. Its infrastructure focuses on delivering large-scale, GPU-powered computing for AI workloads.
Nevertheless, investors have yet to finalize the latest financing. Nscale and Goldman Sachs declined to comment, while Nvidia and Third Point did not immediately respond to Reuters’ requests for comment.
For now, the proposed $3.5 billion raise highlights the scale of capital flowing into AI infrastructure. It also places Nscale among the companies seeking to tap public markets as demand for AI computing continues to expand.
