UK-based AI infrastructure provider Nscale has secured $3.4 billion in pre-IPO financing, closing in on the upper end of the up-to-$3.5 billion target it was reported to be seeking earlier this month ahead of a New York Stock Exchange flotation.

Bloomberg reported that hedge fund Third Point led the convertible note offering, which also drew backing from Nvidia, Apollo, Citadel, Hudson Bay Capital, the Abu Dhabi Investment Council and 8090 Industries. Goldman Sachs acted as placement agent.

The structure of the deal signals how much investors want exposure to AI compute capacity — and how much protection they demand for it. Nscale signed the subscription agreement on 15 September, three days before filing it with the US Securities and Exchange Commission, and the deal required the company to raise at least $3.1 billion.

The financing package comprises a $2.4 billion tranche and a separate $1 billion commitment from Nvidia, which is expected to close around 16 November. The notes convert into ordinary shares when the IPO completes, with Nvidia receiving non-voting stock. The conversion price is expected to be set at a double-digit discount to the IPO price; that discount will keep increasing until Nscale reaches a $30 billion valuation, then remain fixed.

NYSE listing in motion

Nscale filed paperwork earlier this month to list on the NYSE under the ticker NSCL, with reports pointing to a target valuation of up to $35 billion. Goldman Sachs, JPMorgan Chase and Morgan Stanley lead the bookrunning syndicate, with another 19 banks involved.

The filing lays out the commercial engine behind that ambition. Contracted customer value stood at $103.4 billion at the end of August, up from $38 billion at the end of 2025. Agreements signed with Anthropic on 25 August account for around $44.6 billion of that figure and cover dedicated GPU infrastructure at Nscale's Monarch Compute Campus in West Virginia.

The growth is real but so are the losses. Revenue for the six months to 30 June rose from $10.4 million to $140.6 million year-on-year, while net loss widened from $368.9 million to just over $1 billion. Nscale also disclosed material weaknesses in its internal financial controls — a disclosure that will draw scrutiny from IPO investors weighing a valuation grounded almost entirely in long-dated contracts rather than current earnings.

Microsoft and Nvidia anchor the model

Nscale rents computing capacity to companies building AI products, and its two most significant relationships illustrate the model. Its deals with Microsoft include a $6.2 billion AI campus in Narvik, Norway, alongside an agreement to supply 200,000 Nvidia GPUs — an arrangement the Financial Times reported could generate $14 billion in revenue. Nvidia, meanwhile, is simultaneously a supplier, investor and soon-to-be shareholder.

On the infrastructure side, the company said its owned and controlled power pipeline grew from 750 megawatts to more than 10 gigawatts in less than two-and-a-half years, reflecting the land-and-power land grab that now defines AI data centre competition.

The filing also disclosed a planned acquisition of Anyscale, the developer of the Ray distributed-computing framework, which is expected to close around the same time as the IPO.

Rapid capital ascent

The pre-IPO round caps a run of fundraising that has accelerated in step with the sector. Nscale raised $1.1 billion in a Series B round in September 2025, followed by a $2 billion Series C in March at a $14.6 billion valuation. If the IPO prices near the reported $35 billion target, the company's paper value will have risen more than twofold in under a year.

Its board now includes former Meta Platforms executives Sheryl Sandberg and Nick Clegg, former Yahoo president Susan Decker and former OpenAI executive Fidji Simo — a roster assembled to reassure public-market investors as much as to govern.

With Nvidia's $1 billion commitment set to close around 16 November and the Anyscale acquisition timed to the flotation, Nscale appears positioned to complete its listing with both balance sheet and boardroom in order, though the disclosed control weaknesses and widening losses will frame how investors price the debut.