Nscale Backs Robot Firm Figure Alongside $3.5 Billion Cloud Deal

Nscale struck a deal to supply at least $3.5 billion worth of AI cloud computing capacity to the robotics startup Figure, while also investing an undisclosed sum in the company.

Nscale will use Nvidia Corp. chips at a site in Barstow, Texas, to fulfill the contract beginning in the second half of 2027, the company said in a statement Thursday, noting that there’s an “intent to scale” to more than $6 billion worth of computing. The cloud provider also made an investment in Figure that it said “reflects a shared approach to vertically integrated AI” and will serve as the startup’s “preferred compute provider.”

In investing in a key customer, Nscale is taking a page from the much-larger AI player Nvidia, which has invested tens of billions of dollars in partners and customers and is backstopping their purchases of its chips. Some on Wall Street have raised concerns about these so-called circular deals, warning that they threaten to artificially inflate AI demand. Nvidia is an investor in both Nscale and Figure.

Nvidia Chief Executive Officer Jensen Huang weighed in on the deal announced Thursday, saying Nscale and Figure “have activated the robotics flywheel.”

Read More: Robotics Startup Figure AI Valued at $39 Billion in New Funding

Figure, which is focused on developing humanoid robots, raised more than $1 billion in committed capital in a financing round that valued it at $39 billion last year. Founded in 2022, it has emerged as one of the most prominent startups seizing on the advances in AI models to develop robots that look and move more like people.

Nscale is meanwhile seeking to raise as much as $3 billion in a US initial public offering, Bloomberg reported last month, citing people familiar with the matter. The London-based company is heading for an IPO that could take place as soon as September.