AI cloud firm Nscale faces investor pushback over IPO valuation
This comes after its investor Microsoft pulled out of a UK data centre deal with the firm
Nscale, an AI cloud firm backed by Microsoft, is facing pushback from investors over its planned IPO valuation. The company had sought a valuation of about US$30 billion, but some investors have suggested a more conservative range of US$16 billion to US$19 billion, according to sources familiar with the matter. This pushback comes amid a series of market setbacks for AI companies and a growing skepticism about the long-term potential of AI infrastructure.
Microsoft's withdrawal from a UK data center deal with Nscale due to power constraints has further complicated the situation. The firm filed for a US listing on September 18th, but has not yet begun formal marketing despite the 15-day waiting period having passed. The U.S. Securities and Exchange Commission (SEC) is reviewing Nscale's filing, and the company intends to resume marketing once that review is complete.
Deliberations over the IPO plan are ongoing, and the final details may yet change. Nscale has raised US$3.36 billion in a pre-IPO financing round, but stock prices for several of its peers have been falling. Competitors such as CoreWeave and Nebius Group have seen significant drops in their stock values, reflecting broader challenges in the AI sector.
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