Key facts
- Nscale plans to list on the NYSE and raise $3 billion.
- 85% of Nscale's $103 billion in contracts comes from Microsoft and Anthropic.
- Nscale reported revenue of $140.6 million for the six months ended June 30, up from $10.4 million a year earlier.
- Net losses for Nscale jumped to $1.02 billion from $369 million in the same period.
- Nvidia agreed to provide Nscale with $1 billion in convertible debt.
- Nscale's board includes former Meta executive Sheryl Sandberg and former OpenAI executive Fidji Simo.
British neocloud provider Nscale is preparing for its initial public offering on the NYSE, aiming to raise $3 billion and test investor appetite for companies heavily reliant on a few major clients. The company has amassed over $103 billion in contracts, with approximately 85% of that revenue stemming from agreements with Microsoft and AI lab Anthropic. Nscale's deal with Anthropic is contingent on securing financing and meeting stringent milestones.
The heavy customer concentration mirrors trends seen across the AI infrastructure sector, as highlighted by a recent paper from Sona Asset Management. Competitors like CoreWeave derive 67% of their revenue from Microsoft, and Applied Digital relies on Oracle (67%) and CoreWeave (30%). While this interconnectedness isn't inherently negative, Sona noted it makes the industry vulnerable to shifts by major players.
Nscale reported revenue of $140.6 million for the six months ended June 30, a significant increase from $10.4 million in the prior year. However, net losses widened to $1.02 billion from $369 million during the same period. Earlier this month, Nscale received $1 billion in convertible debt from investor Nvidia as part of a larger $3.1 billion financing round. The company was previously valued at $14.6 billion after raising $2 billion in a Series C round led by Aker ASA and 8090 Industries. Nscale operates data centers in Norway, Portugal, Texas, and West Virginia. Its board includes former Meta executives Sheryl Sandberg and Nick Clegg, and former OpenAI executive Fidji Simo.