Data center builder Nscale files for IPO after multibillion-dollar Anthropic deal

Nscale Global Holdings Ltd. has filed for an Initial Public Offering (IPO) on the New York Stock Exchange, according to recent wire material. The data center builder, which specializes in constructing AI-optimized facilities, has not disclosed the exact amount it seeks to raise. Sources suggest the company is targeting up to $3 billion.

In March, Nscale's valuation stood at $14.6 billion. The company has not yet turned a profit, as evidenced by a $1.02 billion net loss in the first half of the year, a significant increase from the previous year. However, revenue has surged more than 1,250% in the same period, reaching $140.6 million.

Nscale's rapid growth is expected to persist. Last month, the company secured a $44.6 billion infrastructure deal with AI developer Anthropic PBC. This agreement will provide Anthropic with approximately 460 megawatts of computing capacity at Nscale's flagship West Virginia facility, known as Monarch. This site will be powered entirely by an on-premises microgrid.

Nscale projects a "clear expansion path to 8GW+" of capacity. The company is also engaged in 11 other data center projects, expanding upon the five existing facilities already operational in Ireland, Norway, and Portugal.

Nscale currently operates with 25,000 graphics processing units (GPUs) and has an additional 461,000 active and contracted GPUs. The company has recently issued $3.1 billion worth of convertible notes, which can be converted into shares. $1 billion of these notes will be issued to Nvidia Corp. This financing, along with over $4.6 billion in debt raised since the start of the year, supports Nscale's ongoing investments in data centers.

The company plans to utilize the funds to construct a 200-megawatt data center in Ward County, Texas, and to upgrade a 96-acre site in Madison, North Carolina.

Nscale anticipates significant improvement in profit margins as its data center capacity and revenue increase. The company's expenses, such as engineering costs, are expected to remain relatively stable. The IPO prospectus explains that profit margins are projected to stabilize at higher levels as contracted deployments become fully operational and achieve steady-state utilization. Nscale intends to list its shares under the ticker symbol NSCL.