Nscale IPO Files to Go Public, Shows Huge Revenue Jump And Steep Losses

Nvidia-backed startup Nscale disclosed Friday that revenue had surged 10 times in the first half of this year from the year-ago period, but losses mounted as the cloud startup spent billions on data centers and the AI chips they’ll house.

The two-year-old UK startup, a spinout of an Australian crypto miner, became a major force in providing compute to AI companies in March when it bought American Intelligence & Power, a company that owns a massive data center complex in West Virginia.

Revenue is still relatively small. Nscale generated around $140 million in revenue for the first six months of this year vs. $10.4 million in the same period last year. Net losses jumped to $1 billion, compared to $369 million in the first half of last year. Capital expenditures for the most recent period jumped to $3.2 billion.

Nscale is projecting $103 billion of total contracted revenue after signing on a slew of commitments in recent months. Those include a $45 billion computing deal with Anthropic and a smaller deal with robotics startup Figure. Nscale also disclosed that Microsoft is expected to pay Nscale $43.8 billion through 2033.

Still, the company warned that revenue could be heavily concentrated among Microsoft and Anthropic, according to the filing. It expects that concentration to fall in the coming years.

Nvidia, one of Nscale’s major shareholders, earlier this month agreed to invest $3 billion in convertible debt, including $2 billion it agreed to buy in the run-up to the IPO. Previously Nscale had raised $3.3 billion in three venture rounds, which most recently valued the company at $14.6 billion in March.

In the IPO, Nscale is expected to be valued at about $35 billion, according to the Financial Times.

Nscale is going public during a time when shares of the AI-linked companies have been volatile, Some of its publicly-traded competitors such CoreWeave and Nebius have lost more than 10% the past month. Nscale’s board of directors includes former OpenAI executive Fidji Simo and former Meta Platforms chief operating officer Sheryl Sandberg.