Nscale seeks about $3.5 billion pre-IPO funding, source says

By Prathik Jayaprakash and ‌Anzar Mehraj

Sept 4 (Reuters) - ​Cloud ​infrastructure provider Nscale is in talks with potential investors to raise about $3.5 billion in pre-IPO ‌funding, a source familiar with the matter said ⁠on Friday.

Nscale intends to sell as much as $1.5 billion of convertible ‌notes to a group of investors ‌and aims to secure about $2 billion from Nvidia, the source said.

Goldman Sachs is working on the fundraising, with New ​York-based hedge fund Third Point set to lead the convertible note investment, the person added.

The convertible notes ⁠are being offered at a double-digit discount to Nscale's IPO price, the source ​said. The discount would be adjusted up to a $30 billion valuation, above which the conversion ​price would remain unchanged, the source ‌added.

Third Point and Nvidia did not immediately respond to Reuters requests for comment, while Nscale ⁠and Goldman Sachs declined to comment.

Bloomberg News first reported the development on Friday.

Deliberations on the potential investors and size of the ⁠investment are ongoing and could change, the source said.

Reuters reported last ​month that Anthropic had signed a six-year, $45 billion agreement to rent AI computing capacity from Nscale's West Virginia data center campus.

Nscale was ‌valued at $14.6 billion in March, after raising $2 billion in a Series C funding round.

Founded ‌in 2024, Nscale owns and operates its own data centers, ⁠graphics processing units and ‌software stack to ​deliver large-scale, GPU-powered AI compute.

(Reporting by Prathik Jayaprakash and Anzar Mehraj in Bengaluru; Editing by Joyjeet ‌Das)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• ADARx Pharmaceuticals files for proposed IPO
• OpenAI unveils GPT-6 Astra as monitoring concerns grow over AI agents
• Exclusive-US, China gear up for mid-September AI safety talks