Nscale boss seeks to reassure staff amid AI market fears

Nscale’s founder and chief executive has sought to reassure staff about the UK data centre operator’s future as concerns over the AI boom’s sustainability intensify, saying that demand for its services remained “insatiable”.

Josh Payne told staff on Tuesday he was aware that “much of the concern right now is about how companies in our space are funding their future growth”.

Nscale, however, still has “more than $100bn in contracted revenue”, he said in an internal memo seen by the FT. “Our projects are backed by long-term customer contracts, with a robust capital structure behind it.”

The note comes amid widespread investor concerns about the financial stability of the AI sector that triggered share price falls of close to 25 per cent last week for “neocloud” stocks such as Nscale’s competitors CoreWeave and Nebius.

Last month the company filed paperwork for a New York initial public offering. Despite the market concerns, Nscale still aimed to list by the end of this year, according to three people familiar with the matter.

Two of the people said Nscale, which has former Meta executives Sir Nick Clegg and Sheryl Sandberg on its board, was still targeting a valuation of $30bn to $35bn.

Australian data centre group Firmus this month abandoned a $5bn listing in Sydney, blaming “recent market volatility”, which helped spark a wider rout in AI-related stocks.

The market gyrations and Microsoft’s decision to pull out of a contract to rent capacity at Nscale’s east London data centre had led some industry figures to speculate that Nscale may be forced to cut its valuation to achieve a listing.

Nscale was valued at $14.6bn in a funding round in March when it raised $2bn. However, one of the people familiar with the matter said an IPO was unlikely to take place at any valuation close to that figure.

Payne said in the memo there would always be “bulls and bears” in the market, but that the company continued “delivering for its customers”, adding: “The numbers speak for themselves.”

Nscale reported a net loss of $1bn on revenue of $141mn in the first half of 2026.

Microsoft remained “committed” to its partnership with Nscale despite pulling out of the Loughton contract, Payne added.

Nscale, which counts Microsoft and Anthropic as its two largest customers, has come under increasing pressure to roll out its planned data centres or risk industry-standard penalties for late delivery.

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Nscale had more than $103bn in total contracted value at the end of August, although only $2.6bn of this was active.

The fragility of the company’s contracts has also come under scrutiny following Microsoft’s exit from the Loughton site.

Anthropic could also walk away from its $45bn deal with Nscale if the group does not hit financing or delivery timelines for its major project in West Virginia.

The UK start-up is also in talks with Anthropic for a second multibillion-dollar deal in West Virginia. Terms are yet to be agreed, the FT reported this week.

Nscale declined to comment.