Third Point set to lead Nscale’s $1.5bn pre-IPO convertible funding

Hedge fund Third Point is poised to spearhead a planned $3.5 billion pre-IPO fundraising effort by AI cloud infrastructure firm Nscale, as the company gears up for a potential public listing, according to a Reuters report. The source, speaking on condition of anonymity, disclosed that Nscale is in talks with investors about financing worth up to $1.5 billion in convertible notes, in addition to a possible $2 billion investment from Nvidia.

Third Point, founded by Dan Loeb and based in New York, is anticipated to lead the convertible note investment, with advice from Goldman Sachs on the fundraising. The convertible notes are being offered at a discount to Nscale's eventual IPO price, with the discount set to increase up to a valuation of $30 billion, after which the conversion price would become fixed.

The magnitude of the fundraising and the final list of investors are still subject to discussion and could undergo changes, the source added. Both Third Point and Nvidia have not yet provided responses to requests for comment, while Nscale and Goldman Sachs have declined to comment as well. Nscale, established in 2024, manages data centers, GPUs, and its proprietary software platform aimed at delivering large-scale computing power for AI applications.

The company was valued at $14.6 billion in March following a $2 billion Series C financing round. Its prospects have been bolstered by a surge in demand from prominent AI companies. In a separate development last month, Reuters reported that Anthropic had secured a six-year, $45 billion agreement to lease AI computing capacity from Nscale's data center campus in West Virginia.