AI Infrastructure Firm Nscale Seeks $3.5 Billion in Pre-IPO Funding, Source Says

Cloud infrastructure provider Nscale is in discussions with potential investors to raise about $3.5 billion in a pre-IPO funding round, a source familiar with the matter told Reuters on Friday. The move signals strong investor demand for AI-focused infrastructure ahead of a potential public listing.

Fundraising Details

The proposed fundraising is expected to be structured in two parts. Nscale is aiming to secure approximately $2 billion directly from chipmaker Nvidia and sell as much as $1.5 billion in convertible notes to a separate group of investors, according to the source.

Goldman Sachs is reportedly arranging the financing. The convertible note portion is set to be led by New York-based hedge fund Third Point. The notes are being offered at a double-digit discount to Nscale's eventual IPO price, with the conversion price adjustment capped at a $30 billion company valuation.

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Company Context and Valuation

This funding round follows a period of rapid growth for Nscale, which was founded in 2024. The company was valued at $14.6 billion in March after it raised $2 billion in a Series C funding round. Deliberations on the current fundraising are ongoing and the final size and investors could change, the source noted.

Nscale, which owns and operates its own data centers and GPU-powered AI compute stack, recently signed a significant six-year, $45 billion agreement with AI firm Anthropic to rent computing capacity, as reported by Reuters last month. Nscale declined to comment on the funding talks, while Goldman Sachs, Third Point, and Nvidia did not immediately respond to requests for comment.