Nscale’s $35bn IPO: off-the-scale ambition?

When the former deputy PM Nick Clegg – and his erstwhile Meta colleague Sheryl Sandberg – joined the board of Nscale in March, it looked like something big was in the offing. And so it has proved, said Elias Schisgall in The Wall Street Journal.

The British tech unicorn, which operates a string of AI-ready data centres in the US and Europe and is backed by the deep pockets of Nvidia, has filed for an IPO on the New York Stock Exchange. Founder Josh Payne promises “a fully vertically integrated platform that can deliver computing power to the AI boom at scale”. Nscale has just won a huge contract to supply computing capacity to Anthropic worth $45 billion over six years.

Even so, the mooted $35 billion valuation looks heroic, said FT Alphaville. Six months ago, the company, which reported a $1.02 billion loss in the first-half, was valued at just $14.6 billion. Now it is “a multibillion-dollar bet that investor enthusiasm for computing infrastructure projects will endure”, despite growing calls for an AI slowdown. Spun out of an Australian crypto mining group in 2024, Nscale is relatively untested. Remarkably for the leader of a company of its age and size, Payne, 32, bagged total compensation of £17.2 million last year.

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Part of Nscale’s shtick is that “its British roots” are “a competitive advantage in the race to build sovereign AI infrastructure across Europe”, said Saskia Koopman in City A.M. Indeed, it intends to “open its IPO to ordinary British investors” through a UK retail offer. There’s no shortage of “heavyweight names” or “lofty” ambitions in the prospectus, said Ben Martin in The Times. But Nscale will ultimately live or die on its ability to secure “significant multi-year customer contracts”. That means “substantial upfront capital expenditure”.