Nscale IPO Filing Reveals 85% of $103B Contract Value is Tied to Microsoft and Anthropic

British data center developer Nscale revealed a significant customer concentration risk in its initial public offering filing on Friday, stating that 85% of its $103 billion in total contract value is derived from agreements with Microsoft Corp. and Anthropic PBC.

High-Stakes Contracts

According to the S-1 filing, the company's dependency on these two major technology clients is substantial. The documents detail multiple deals with Microsoft signed since late 2025, worth approximately $43.8 billion through 2033. A more recent agreement signed in August with artificial intelligence firm Anthropic is valued at $44.6 billion and also extends through 2033.

Nscale directly acknowledged the potential vulnerability in its filing, stating, "a substantial portion of our revenue is driven by a limited number of our customers." This concentration poses a key risk for potential investors to evaluate as the company prepares to go public.

Execution Risks and Financials

The company's ambitious plans come with considerable execution hurdles. Nscale has not yet secured financing for the massive Anthropic deal, which requires the construction of an eight-gigawatt data center facility in West Virginia. The contract includes termination clauses if Nscale fails to meet specific milestones and power requirements, with the first two gigawatts scheduled to come online in 2028.

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Financially, the company is still in a high-growth, high-spend phase. For the first half of the year, Nscale reported a net loss of $1.02 billion on revenue of $140.6 million. As of the end of August, only $2.6 billion of its total contract value was active, underscoring the long-term nature of its agreements.

Nvidia's Strategic Backing

Adding a layer of strategic and financial support, Nvidia Corp. is a major shareholder and the primary chip supplier for Nscale's data centers. Nvidia has provided significant backing, including investing in funding rounds and acting as a backstop for approximately $860 million in lease obligations.

Nvidia also participated in Nscale's $3.1 billion financing package last week, receiving $1 billion in convertible notes or non-voting shares. According to a report from the Financial Times, Nscale is targeting a valuation of up to $35 billion for its New York public listing.