Nscale's $3.36B Pre-IPO Raise Doubles Its Valuation — and Deepens Nvidia's Neocloud Bet
Nscale, the London-based "neocloud" that rents GPU capacity for AI workloads, has closed $3.36 billion in pre-IPO convertible loan notes led by Dan Loeb's Third Point, with Nvidia committing $1 billion of the total, according to reporting from Tech Funding News, The Tech Capital, and The Energy Mag. The round values the company at roughly $35 billion — more than double the $14.6 billion valuation it carried after its $2 billion Series C just six months earlier, in March, when CNBC first reported Nvidia's backing of the startup.
The financing lands exactly a week after Nscale filed for a New York Stock Exchange listing on September 18, and the structure matters as much as the size: these are convertible notes, not straight equity, meaning they automatically convert into shares once the IPO prices. The investor roster is unusually broad for a private infrastructure deal — Apollo funds, Citadel, Hudson Bay Capital, the Abu Dhabi Investment Council, Wellington Management, Qube Research & Technologies, and Davidson Kempner Capital Management all participated alongside Third Point and Nvidia, per Tech Funding News and The Energy Mag's overlapping investor lists. Nvidia's $1 billion piece is structured to fund by mid-November and will convert into non-voting stock, a detail both outlets confirm.
A familiar Nvidia pattern
Nvidia writing a nine-figure-plus check into a company that is simultaneously one of its largest GPU customers is now a recognizable playbook — echoing its stakes in CoreWeave, OpenAI, and xAI — and it draws scrutiny for the same reason each time: the chipmaker's investment helps its customer buy more of its own chips, inflating demand it then reports as revenue. Nscale's own disclosures lean into the scale of that demand rather than away from it; The Energy Mag reports the company now claims over $103 billion in total contracted customer value, built on commitments that include a Microsoft deal for 200,000 Nvidia chips and infrastructure work tied to the UK's OpenAI-Nvidia Stargate project, per Nscale's public filings.
"This marks a milestone for Nscale as we continue scaling our full-stack AI infrastructure to meet unprecedented global demand. With the backing of these world-class investors, we are strongly positioned to accelerate our data center buildouts globally." — Josh Payne, founder and CEO, Nscale
Payne co-founded Nscale in May 2024 as a spinout of Arkon Energy, a Melbourne-based crypto-mining operator, repurposing that power-and-cooling expertise for AI data centers. The company's capital stack since then shows how fast neoclouds now need to move: a $155 million Series A in December 2024, a $1.1 billion Series B in 2025 backed by Aker, Nvidia, Nokia and Dell, a $433 million pre-Series C SAFE last October, and the $2 billion Series C in March — on top of multiple debt facilities, including a $790 million raise and a roughly $3 billion debt package in August, that push Nscale's total financing past $9 billion since founding, according to Tech Funding News.
Debt-heavy bets ahead of a crowded IPO window
The mix of convertible debt, vendor financing from Nvidia, and an imminent IPO places Nscale squarely in the same category as CoreWeave, whose 2025 public listing became the template for GPU-leasing businesses racing to build data center capacity faster than their balance sheets can comfortably absorb. For investors, the bet is that AI compute demand keeps outrunning supply long enough for contracted revenue to catch up with leverage; for Nscale, the pre-IPO round buys time and credibility before it has to prove that math to public-market shareholders.