Nscale Seeks $35 Billion IPO Valuation With Nvidia Footing the Bill

Nscale, the Nvidia-backed "neocloud" spun out of an Australian crypto miner just two years ago, filed for a New York listing last week at a valuation of up to $35 billion, according to the Financial Times.

The company builds or finances AI-ready data centers and rents out the computing power. London-headquartered Nscale is run by founder and CEO Josh Payne. It was spun out of Australian crypto miner Arkon Energy in 2024. Its board includes former Meta COO Sheryl Sandberg, former U.K. deputy prime minister Nick Clegg, and former Yahoo president Susan Decker.

The S-1 filing lays out the risk. Nscale posted a net loss of $1.02 billion in the six months to June 30, 2026. At one point, per the filing, its own management flagged "substantial doubt" about its ability to continue as a going concern.

Despite those losses, Nscale is asking Wall Street to value it at as much as $35 billion on the promise that $103 billion in contracts—much of them not yet firm—will turn into revenue on schedule.

Nvidia's deepening stake

Front and center in the S-1 are Nscale's deep links to Nvidia. The chipmaker is Nscale's biggest supplier, one of its investors, and—depending on how the IPO prices—soon to be one of its largest shareholders.

On Sept. 15, Nscale signed a subscription agreement for a $3.1 billion financing round, of which Nvidia itself is taking $1 billion in convertible notes or non-voting shares.

Previous filings from Nscale's own U.K. company accounts in October 2025 showed that Nvidia bought warrants for over 157,945 Nscale shares for $60 million. In exchange, it agreed to guarantee up to $860.3 million of Nscale's lease obligations at a facility in Ward County, Texas.

Nvidia has been fairly open about propping up companies like Nscale. Back in April, Nvidia CEO Jensen Huang said, referencing both Nscale and CoreWeave, another neocloud company: "If we didn't support CoreWeave to exist, these neoclouds, these AI clouds, wouldn't exist… If we didn't support Nscale, they wouldn't be where they are today."

The extent of Nscale's reliance on Nvidia raises familiar questions about circular financing. The chipmaker is providing funding—in the form of investment, loans, or loan guarantees—to customers who then send money back to it in the form of GPU purchases. In some cases, Nvidia also invests in the AI companies buying data center capacity from the neoclouds. In those cases, it is Nvidia's money simply passing from one place to another. Investors are left trying to work out how much of the AI boom's growth is real demand versus one company's balance sheet talking to itself.

CoreWeave as precedent

CoreWeave is probably the best point of reference for how Nscale's IPO may go. CoreWeave posted an $863 million net loss in 2024—the last full year before its March 2025 IPO, as disclosed in its own S-1. The same filing showed that two customers—Microsoft and a second buyer widely reported to be Nvidia itself—made up 77% of its revenue.

CoreWeave's debut was shaky: it priced below its range and closed flat on day one. The stock then went on a huge run, more than doubling within months.

The open question is whether the market is still in the same place as it was in March 2025. Earlier this month, a warning from Anthropic's Dario Amodei about the pace of AI development—echoed by Sam Altman and Elon Musk—helped wipe close to 6% off the semiconductor index in a single session. A spike in Treasury yields made investors less patient with unprofitable growth stories generally.

Community and political pushback against data centers has also intensified globally, with some politicians proposing bans on the rapid build-out Nscale is relying on. And there is a question of how many loss-making, billion-dollar companies the market will tolerate.

A test for the AI listing queue

Nscale is getting ahead of companies like Anthropic and OpenAI in the IPO queue. Going first may mean Nscale tests the waters for later listings by frontier AI companies.

If the neocloud prices well, it sets a valuation benchmark and a tailwind for the much bigger listings expected from Anthropic later this year and OpenAI sometime in early 2027. If Nscale stumbles, it is a much cheaper way for Wall Street to find out where the AI infrastructure story breaks than waiting for a trillion-dollar name to test it first.