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Nscale seeks a $35 billion valuation after losing $1.02 billion in six months
Nscale has filed to list in New York at a valuation of up to $35 billion after losing $1.02 billion in the six months to June 30. Nvidia sells it chips, has invested in it and guarantees some of its leases, so the listing tests how much of that risk public buyers will share.
The Investor · Invest desk
What happened
- London-based neocloud Nscale filed for a New York listing last week at a valuation of up to $35 billion, according to the Financial Times.
- The valuation rests on $103 billion in contracts, much of them not yet firm, turning into revenue on schedule.
- Nscale's October 2025 U.K. accounts showed Nvidia paid $60 million for warrants and agreed to guarantee up to $860.3 million of leases at a Ward County, Texas site.
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Why it matters
- exposure Nvidia has $1.06 billion invested and up to $860.3 million of Texas lease payments guaranteed, so a weak listing or a missed lease payment reaches the chip supplier's own balance sheet.
- precedent A listing near $35 billion, after a half-year loss bigger than CoreWeave's full pre-IPO year, would tell other Nvidia-backed neoclouds that public markets will fund them before profits.
- constraint At a $2.04 billion annual loss rate, with a going-concern warning already on record, Nscale depends on outside capital, Nvidia's included, until the backlog becomes revenue.
CoreWeave, the nearest precedent, lost $863 million in 2024, its last full year before a March 2025 listing [10]. Nscale lost $1.02 billion in six months [3], about 18% more in half the time [1]. If the second half of 2026 looks like the first, the annual loss is $2.04 billion [2]. CoreWeave also listed with two customers, Microsoft and one widely reported to be Nvidia, supplying 77% of its revenue [10]. It priced below its range and closed flat on day one, then more than doubled within months [11]. Fortune's account of the Nscale filing does not include a revenue figure, so the loss cannot yet be set against sales.
The Nvidia terms are the better puzzle. Nvidia is taking $1 billion of the $3.1 billion round, about 32% [3], as convertible notes or non-voting shares [7]. Neither is ordinary voting stock, so Nscale's biggest supplier [6] is buying economic exposure and leaving the votes to other holders. Nscale's U.K. accounts from October 2025 show an earlier deal. Nvidia paid $60 million for warrants over more than 157,945 shares and, in exchange, agreed to guarantee up to $860.3 million of lease obligations in Ward County, Texas [8]. The guarantee is about 14 times the cash [4]. Across both deals Nvidia's disclosed money in comes to $1.06 billion [5], roughly one half-year of Nscale's losses [3].
Part of that money goes back to Nvidia as GPU purchases, the loop Fortune describes as circular financing [15]. Nvidia's chief executive, Jensen Huang, has been open about it. "If we didn't support CoreWeave to exist, these neoclouds, these AI clouds, wouldn't exist...If we didn't support Nscale, they wouldn't be where they are today," he said in April [9]. Fortune's Beatrice Nolan wrote: "The rest of us are left trying to work out how much of the AI boom's growth is real demand versus one company's balance sheet talking to itself." [14]
Management at one point flagged "substantial doubt" about Nscale's ability to continue as a going concern [3]. The valuation leans instead on $103 billion in contracts, much of it not yet firm [5]. At $35 billion, buyers would pay about 34 cents per dollar of that backlog [6], so the price turns on how quickly contracts convert. As a gauge of public appetite for compute risk, the listing is muddied by who already holds the downside. Nvidia is in the notes and the Texas guarantee, and depending on where the IPO prices, it becomes one of the largest shareholders [6].
In the best case the deal prices near the ceiling and trades up, as CoreWeave eventually did [11]. A lower price is the middle case, and it enlarges Nvidia's place on the register [6]. Delay is the third, and the market supplies reasons. Earlier this month a warning from Anthropic's Dario Amodei about the pace of AI development, echoed by Sam Altman and Elon Musk, helped take close to 6% off the semiconductor index in one session [12]. Treasury yields spiked at the same time [12]. Some politicians have proposed bans on the data-center build-out Nscale depends on [13].
I'd expect Nscale to list, and below the $35 billion ceiling. The case against me is CoreWeave: a large loss, two customers at 77% of revenue and a flat first day, followed by a stock that doubled [10][11]. Suppose Nscale prices at the full $35 billion in a market that just took close to 6% off chip stocks in one session [12]. Then public buyers will carry more compute risk than a $2.04 billion annual loss rate suggests [2], and I am wrong.
What to watch
- An amended S-1 showing how much of the $103 billion in contracts is firm, and on what delivery schedule.
- Whether the $3.1 billion round closes, and whether Nvidia's $1 billion lands as convertible notes or as non-voting shares.
- Data-center ban proposals reaching places where Nscale builds, starting with the Ward County, Texas site covered by Nvidia's lease guarantee.