Nscale seeks a $35bn listing with cost of revenue running $49m above revenue

Cost of revenue exceeded revenue by $49 million in the first half of 2026 ^[1], about 1.35 dollars of direct cost for every dollar billed ^[2]. The only period Nscale cleared a gross profit was 2024, when $19.1 million of revenue produced $6.3 million of it, a margin near 33 percent ^[6][3]. Full-year 2025 revenue was $33 million ^[15]. Since then the top line has grown and the gross line has turned negative.

Founder and chief executive Josh Payne, in a letter to prospective investors included in the filing, described the company as built around "an infrastructure-first thesis, building against contracted customer demand" ^[13]. That contracted demand appears in two sizes. Nscale put total contracted deals at $103.4 billion as of August 31, up from $38 billion at the end of 2025 ^[14]. The S-1's remaining performance obligations, which Fortune describes as future contracts that may or may not come good, are $56.4 billion over seven years ^[10]. The difference is $47 billion ^[8]. Spread the smaller number evenly and it implies about $8.1 billion of revenue a year, roughly 29 times the $281 million annualised rate the first half produced ^[7].

The price itself is unsettled. Fortune, citing the FT, reports a $35 billion target ^[2]; the Seeking Alpha analysis of the deal says $30 billion ^[23]; the filing does not include terms ^[11]. Against the $14.6 billion Series C that Aker ASA and 8090 Industries led in March, $35 billion is 2.4 times the private mark six months later ^[20][9], and about 124 times annualised first-half revenue ^[6]. The Seeking Alpha author, who discloses no position, calls the proposed valuation stretched against peers at a reported 22 times contracted power ^[24].

Cash covers the near term: the $3.1 billion of unsecured convertible loan notes Nvidia bought on September 15 is about three times the half-year net loss ^[9][10]. Nvidia is also in the equity, having backed the $1.1 billion Series B and joined the Series C ^[27]. Management wrote that it has evaluated its ability to "defer, reduce or cancel capital expenditure" if the forecast financing does not arrive, and concluded that plan is probable of being implemented ^[7]. Nscale has five live data centres and 12 under construction ^[18]. The compensation table lists four executives totalling about $54.1 million, including $24.7 million for president APAC Jing Yin and $23.2 million for Payne ^[25][11].

In my view the $35 billion figure gets trimmed before it trades: the last private buyers paid $14.6 billion ^[20], and the book now has to clear at a price set on a negative gross line ^[1] and a disclosed reliance on uncommitted financing ^[7]. The reported $45 billion, six-year Anthropic contract for the West Virginia campus was signed after the March round ^[19], so the private mark is stale, and a builder recognises revenue years after it spends. Either of two disclosures would sink the sceptical reading: remaining performance obligations climbing toward the $103.4 billion contracted total in a later filing ^[10][14], or cost of revenue dropping below revenue as the 461,000 GPUs active or under contract come online ^[5][18].