Nscale Files for IPO at Up to $35 Billion Valuation, with Nvidia Backing
Nscale, a two-year-old neocloud company, has filed for an IPO seeking a valuation of up to $35 billion. The company reported a net loss of $1.02 billion in the first half of 2026, with Nvidia investing $1 billion in convertible notes. Nscale's prospects rely on $103 billion in contracts, many of which are not yet firm.
Nscale emerged from Australian crypto miner Arkon Energy in 2024 and operates from London under CEO Josh Payne. Its board features prominent figures including former Meta COO Sheryl Sandberg and former UK deputy prime minister Nick Clegg. The company's S-1 filing reveals deep financial entanglement with Nvidia, which holds warrants from an earlier $60 million investment and has guaranteed $860.3 million of Nscale's lease obligations at a Texas facility.
The filing shows Nvidia's $1 billion convertible note investment is part of a broader $3.1 billion financing round. Nvidia CEO Jensen Huang has acknowledged the chipmaker's role in sustaining neocloud firms, noting they wouldn't exist without Nvidia's support. CoreWeave's experience offers a reference point—it posted an $863 million loss before its March 2025 IPO, priced below range, yet saw its stock more than double within months.
This IPO could reshape how investors assess the AI infrastructure boom. If Nscale's valuation holds despite substantial losses, it may encourage more speculative capital into neocloud ventures, potentially inflating a sector where revenue projections remain uncertain. The circular financing pattern involving Nvidia could distort market signals, leaving retail investors exposed to risks that aren't fully transparent. A successful listing may also influence how other AI infrastructure companies approach public markets, while a poor performance could cool enthusiasm across the sector.