Nvidia (NVDA) Eyes $2 Billion Stake in Nscale Ahead of Massive IPO

Key Highlights

• AI infrastructure firm Nscale pursues $3.5 billion in capital before its public offering, with Nvidia expected to commit $2 billion
• Hedge fund Third Point to spearhead up to $1.5 billion in convertible debt instruments
• Goldman Sachs serves as financial advisor for the capital raise
• Company boasts $103 billion in secured customer agreements, highlighted by a $45 billion Anthropic partnership
• Planned public offering aims to generate another $3 billion, targeting over $30 billion company valuation

Nscale, an AI cloud infrastructure provider headquartered in London, is currently negotiating a $3.5 billion financing round ahead of its stock market debut. The financing package encompasses $1.5 billion through convertible debt and a possible $2 billion equity stake from semiconductor giant Nvidia.

Goldman Sachs has been tapped to orchestrate the capital raising initiative. Daniel Loeb’s hedge fund Third Point is positioned to anchor the convertible note segment of the transaction.

Investors participating in the convertible note offering will receive terms featuring a double-digit markdown compared to Nscale’s ultimate IPO pricing. This favorable conversion discount applies up to a $30 billion company valuation threshold. Beyond that benchmark, the conversion rate becomes locked.

The AI infrastructure company achieved a $14.6 billion valuation in March following the completion of a $2 billion Series C financing. Nscale commenced operations in 2024.

$103 Billion in Customer Commitments Anchored by Anthropic Partnership

Central to Nscale’s investment thesis is its substantial pipeline of customer commitments. The firm reports approximately $103 billion in secured contractual obligations.

The cornerstone agreement is a six-year, $45 billion contract with AI research company Anthropic. This arrangement grants Anthropic access to computational resources housed at Nscale’s West Virginia data center complex.

Company presentations to potential investors suggest these agreements could generate approximately $18.1 billion in yearly revenue alongside roughly $13.6 billion in adjusted EBITDA. Nscale emphasized these figures represent illustrative scenarios rather than official financial projections.

The company maintains full ownership and control of its data center infrastructure, GPU inventory, and proprietary software platform. The majority of deployed processors are Nvidia Blackwell GPUs. Additionally, Nscale has secured purchase commitments for approximately 194,000 Nvidia Vera Rubin GPU units.

Strategic Diversification Into Robotics and Enterprise Software

Nscale is expanding beyond traditional cloud computing services into the robotics sector. The company recently finalized an agreement to supply robotics developer Figure with a minimum of $3.5 billion in computational infrastructure.

As part of this strategic partnership, Nscale will acquire an equity position in Figure. Separately, in July, the company completed a $1.65 billion acquisition of AI software specialist Anyscale.

A substantial data center complex is under construction in Norway. This Norwegian facility is being purpose-built to accommodate Microsoft’s infrastructure requirements.

An additional major data center campus is in the planning stages for West Virginia, distinct from the existing facility currently serving Anthropic.

The planned IPO could generate up to $3 billion in additional capital beyond the pre-IPO financing round. Discussions regarding the offering’s final size and investor composition remain fluid and subject to modification.

Nvidia has not issued any public statement regarding the potential $2 billion investment commitment. Both Third Point and Nscale representatives declined to provide comment when contacted by Reuters.

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