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

Nscale Global Holdings Ltd. today filed to go public on the New York Stock Exchange.

The company, which builds data centers optimized for artificial intelligence workloads, didn’t reveal how much it hopes to raise. Last month, sources told Bloomberg that Nscale is seeking up to $3 billion. The company was valued at $14.6 billion in March.

Nscale is not yet profitable. It logged a $1.02 billion net loss in the first half of the year, a nearly threefold increase from 12 months earlier. The company’s revenue jumped more than 1,250% in the same time frame to $140.6 million.

Nscale’s rapid top line growth is set to continue in the coming years.

Last month, the company inked a $44.6 billion infrastructure deal with Anthropic PBC. That sum will buy the AI developer about 460 megawatts of computing capacity at Nscale’s flagship West Virginia campus. The site, which is known as Monarch, will be powered entirely by an on-premises microgrid. Nscale says that it has a”clear expansion path to 8GW+” of capacity.

The company is also working on 11 other data center projects. They will join the five Nscale facilities that are already up and running in Ireland, Norway and Portugal. Four of the buildings are colocation hubs that the company shares with other organizations.

Nscale has so far deployed 25,000 graphics processing units in its data center network. It has another “461,000 active and contracted GPUs” on its books that will help meet future customer demand.

Nscale announced its data center contract with Anthropic a day after Figure AI Inc., a humanoid robot developer, committed to renting up to 100,000 graphics cards. Nscale is taking a stake in the startup as part of the deal. Earlier, the former company inked a multibillion-dollar GPU hosting agreement with Microsoft Corp.

The company won’t rely solely on its initial public offering to finance its data center investments. Its prospectus revealed that it had recently issued $3.1 billion worth of convertible notes, debt instruments that can be turned into shares. At least $1 billion worth of notes will be issued to Nvidia Corp. The financing comes on top of the more than $4.6 billion in debt that Nscale has raised since the start of the year.

The company will spend $1.85 billion to build a 200-megawatt data center in Ward County, Texas. Some of the racks at the campus are set to be equipped with Nvidia’s latest Rubin GPUs and Vera central processing units. An additional $1.2 billion will go toward upgrading a 96-acre site in Madison, North Carolina.

Nscale expects its profit margins to improve significantly as its data center capacity and revenue grow. The reason is that expenses such as engineering will remain largely fixed. “As contracted deployments become fully operational and ramp to steady-state utilization, we expect margins to stabilize at higher levels,” the IPO prospectus explains.

Nscale plans to list its shares under the ticker symbol NSCL.

Photo: Nscale