Nvidia investment strategy shifts toward AI cloud providers

Nvidia is reportedly finalizing a massive $3.5 billion investment in British AI cloud provider Nscale to help the company prepare for a public stock listing. The funding, which involves major financial players like Goldman Sachs and Third Point, illustrates a growing trend of chip suppliers providing capital to their customers who use hardware.

As Nscale prepares to go public in the U.S., it has secured a significant purchaser for its advanced hardware products. The company recently placed an order for nearly 194,000 graphics processing units, highlighting its heavy computational demands. By investing directly in Nscale, Nvidia ensures a buyer for its most advanced products, creating a unique financial relationship between the two firms.

Nscale is also strengthening its leadership team ahead of its public listing, with high-profile figures like former Meta executives Sheryl Sandberg and Nick Clegg joining the board. This move is expected to add credibility and industry weight as the company navigates the regulatory environment of the American stock market.

The centerpiece of Nscale's growth story is a six-year, $45 billion contract with AI research firm Anthropic. Nscale will provide the computing capacity needed for Anthropic to develop its models. This deal has doubled Nscale's contracted revenue backlog, increasing it from $51 billion to over $100 billion. However, actual revenue for the company reached only about $100 million in the second quarter of 2026, highlighting the gap between promises and current earnings.

In March, Nscale's valuation was reported at $14.6 billion, with a new round of convertible notes capping the valuation at $30 billion. The rapid jump in valuation relies heavily on the success of the Anthropic partnership, and investors will now have to assess whether Nscale can deliver on its promises and meet the high standards set by major cloud providers like Microsoft and Google.