Nscale Global Holdings Ltd. faces uncertainty regarding its planned U.S. initial public offering following the cancellation of a key data center project in Loughton, U.K. Microsoft, the startup's largest customer, terminated the agreement after local grid officials stated that sufficient power would not be available for the site until the 2030s.
The Loughton facility was intended to host 23,040 Nvidia GPUs, providing 50 megawatts of AI capacity with potential expansion to 90 megawatts. This project was part of a broader $24 billion contract between Nscale and Microsoft, which includes other sites in Texas, Portugal, and Norway. Nscale maintains that its long-term relationship with Microsoft remains intact for other projects.
Nscale recently filed for an IPO on the New York Stock Exchange under the ticker NSCL. The company aims to raise $3 billion at a valuation of approximately $35 billion, significantly higher than its previous private valuation of $15 billion. However, investor confidence is challenged by the fact that Microsoft and Anthropic PBC represent 85% of Nscale's total contract value.
The startup is also managing construction difficulties at a facility in Norway, involving cooling system leaks and regulatory issues. These setbacks occur amid a broader cooling of investor sentiment toward AI infrastructure projects, as evidenced by recent financing challenges at CoreWeave, Oracle, and the abandoned IPO of Firmus Technologies.
