AI data center firm Nscale faces IPO scrutiny over reliance on Microsoft and Anthropic
British neocloud Nscale is set to list on the NYSE with a reported $35 billion valuation, but its IPO filing reveals that 85% of its contract value comes from just two customers: Microsoft and Anthropic. The Anthropic deal is conditional on Nscale securing financing and meeting stringent milestones. The company's revenue surged to $140.6 million in the first half of 2026, yet net losses expanded to $1.02 billion.
Nscale was spun out of Australian crypto miner Arkon Energy two years ago. Its $103 billion contract backlog is dominated by two agreements: a $43.8 billion Microsoft compute deal running through 2033 and a $44.6 billion Anthropic supply pact. The Anthropic arrangement is not guaranteed, as it depends on Nscale securing financing and meeting strict performance targets.
The company's financials show rapid growth but deep losses—$140.6 million in revenue for the first half of 2026 versus $10.4 million a year earlier, with net losses ballooning to $1.02 billion. Nvidia recently injected $1 billion in convertible debt as part of a $3.1 billion round. Competitors like CoreWeave and Crusoe face similar concentration risks, while Nscale's board features former Meta and OpenAI executives.
The heavy reliance on Microsoft and Anthropic means Nscale's fortunes are tightly linked to the strategic whims of two tech giants. If either scales back or cancels contracts, the ripple effect could destabilize not just Nscale's stock but the broader AI infrastructure ecosystem, potentially slowing AI development and affecting investors, employees, and downstream customers. This concentration may also discourage smaller players from entering the market, concentrating power further.