British data centre group Nscale files for $35bn US listing

Nvidia-backed AI cloud provider Nscale has filed to go public in the US just two years after it was spun out of a crypto mining group, in a multibillion-dollar bet that investor enthusiasm for computing infrastructure projects will endure growing calls for an AI slowdown.

The London-headquartered group, which counts former UK deputy prime minister Nick Clegg and former Meta executive Sheryl Sandberg as members of its board, was targeting a valuation of up to $35bn in its initial public offering, said people familiar with the matter.

The group reported a net loss of $1bn on revenues of $141mn in the first half of the year, with the bulk of the loss driven by non-cash charges.

Nscale, led by founder Josh Payne, raised $2bn in March at a $14.6bn valuation in a round led by Norwegian energy group Aker and 8090 Industries, with backing from Nvidia, Dell and Nokia, among others. Ahead of its IPO, it has raised a total of $3.7bn in equity and more than $5bn in debt, according to deal tracker Dealroom.

As part of its listing, Nscale will launch a retail offering for UK investors, allowing them to purchase shares at the same price as existing shareholders via the investment platform RetailBook, according to people familiar with the matter.

The company, which is listing on the New York Stock Exchange while maintaining its British domicile, employs about 450 people in the UK.

The group was spun out of Australian bitcoin mining infrastructure group Arkon Energy in 2024 and has rapidly become one of Europe’s best-funded data centre providers, despite its limited record. It has received enthusiastic endorsement from Nvidia’s chief executive Jensen Huang who last year declared it a “national champion for the UK”, as the Silicon Valley chip group said it planned to invest £500mn in Nscale.

Nscale said it had 7MW of active computing power in its own data centres and another 48MW running in rented data centre space, as of the end of August, under contracts worth $2.6bn. It has a further 1.3GW of capacity in the pipeline to fulfil $101bn of contracts not yet started.

The company’s prospectus highlighted the depth of its relationship with Nvidia, its GPU supplier, customer and financial patron.

The chipmaker has signed a $1.2bn deal to lease capacity from Nscale and invested over $2bn in Nscale, including $1bn of convertible notes subscribed as recently as Tuesday. It has separately guaranteed $860mn of Nscale’s lease obligations at a facility in Texas.

Amid booming demand for AI infrastructure that has also propelled upstart cloud providers such as CoreWeave, Crusoe and Nebius, Nscale has won big contracts with Microsoft and OpenAI. However, the ChatGPT maker in April put on hold its planned Stargate UK project at an Nscale site in north-east England. Former OpenAI and Meta executive Fidji Simo joined Nscale’s board last week.

The UK company last month signed a landmark deal with Anthropic to rent capacity from its flagship data centre in West Virginia, in an agreement worth up to $45bn over six years. Nscale has estimated the site, which is under construction and is scheduled to start coming online late next year, will cost about $70bn, including a 2-gigawatt natural gas power plant to support the facility.

However, last weekend, Anthropic’s chief executive Dario Amodei called for an industry slowdown in AI development, in a move backed by OpenAI’s Sam Altman and SpaceX’s Elon Musk. The calls sparked a sell-off among AI infrastructure and semiconductor stocks at the start of the week, driven by fears that Big Tech companies would slow their capital investment in data centres.

Nscale’s filing comes after nuclear energy company Holtec International on Wednesday pulled its planned IPO over investor concerns about a potential slowdown in the AI data centre market.

Westinghouse Electric, the US nuclear reactor design and services group, confidentially filed for an IPO in July and hopes to fetch a valuation of roughly $50bn, according to a person familiar with the matter.

Japanese investment group SoftBank, meanwhile, hopes to list its US data centre developer, SB Energy, sometime in the next few weeks. OpenAI and Nvidia will own large stakes in the company, which is targeting a valuation of about $50bn despite having yet to bring a single facility online.