Nscale has raised another $3.36 billion of convertible financing as it looks to turn a rapidly growing backlog of AI contracts into live data centre and GPU capacity.
The financing is led by Third Point and includes participation from Apollo-managed funds, Citadel, Abu Dhabi Investment Council, as well as others. An initial $2.36 billion tranche closed immediately, while Nvidia is stumping up the other $1 billion, which is expected to land in mid-November.
It’s no surprise to see Nscale raise so much capital given its growing need to build out its AI infrastructure. That’s especially important given the firm has a growing book of contracted demand, while much of the capacity required to serve it is not yet active
In fact, according to Nscale’s IPO filing, it had $103.4 billion of active and contracted total contract value at the end of August, and yet only $2.6 billion was active. That gap reflects how much infrastructure Nscale still has to deliver, with around 461,000 GPUs active or contracted compared with only 25,000 currently active.
That means Nscale still has some way to go to deliver on its potential – and that requires significant capital. It’s why it raised this $3.36 billion, and it helps explain why it’s going for an IPO in the first place. Nscale says the latest financing will support expansion across the company’s infrastructure stack, including behind-the-meter power generation, liquid-cooled data centres and large-scale GPU clusters.
Financing the contract book
The scale of that funding requirement has become clearer in recent months too, especially as it was revealed that the company had signed a roughly $45 billion compute agreement with AI giant Anthropic.
As part of those agreements, Nscale is required to use its best efforts to obtain financing for both the GPU equipment and data centre infrastructure needed to deliver what it has promised – and the firm is building its war chest.
On top of the new $3.36 billion of financing announced, Nscale secured a $900 million revolving credit facility in July to support its AI infrastructure expansion. It then closed around $3 billion of aggregate commitments across two delayed-draw term loan facilities in August, primarily to finance GPU, networking, storage and liquid-cooling equipment at projects in Texas and North Carolina.
Nscale could raise considerably more capital through its planned New York Stock Exchange listing. The firm was reported in August to be seeking as much as $3 billion through its IPO, although the eventual size of the offering could still change, as we don’t yet know the number of shares or expected price range. Even so, the proposed listing reinforces just how much capital Nscale is seeking to finance its lofty expansion aims.
