Nscale files for IPO with revenue tied mostly to Microsoft and Anthropic

In short: Nscale is preparing to go public in the US, and its business depends heavily on just two customers, Microsoft and Anthropic.

What happened

Nscale, a British company that builds and runs data centers for AI work, is planning an IPO, which is when a company sells shares to the public for the first time. It plans to list on the New York Stock Exchange (NYSE).

In its IPO filing, Nscale said it has more than $103 billion in contracts. But about 85% of that total comes from two deals, one to supply Microsoft with $43.8 billion worth of computing power through 2033, and another worth $44.6 billion with the AI company Anthropic.

The filing also says Anthropic’s agreement depends on Nscale getting financing. Anthropic can cancel or walk away if Nscale does not hit certain “stringent” milestones, which are specific targets the company must meet.

Financial Times reported Nscale expects a $35 billion valuation. Bloomberg reported the company is seeking to raise up to $3 billion in the offering. Nscale reported $140.6 million in revenue for the first six months ended June 30, up from $10.4 million a year earlier, and it reported a net loss of $1.02 billion.

Why it matters

For everyday investors, this is a reminder that some AI infrastructure companies can look large on paper but still rely on a small number of customers. It is like a supplier with only two big buyers, if one buyer changes plans, the supplier’s future can shift quickly. Nscale’s IPO will show whether public markets are comfortable with that kind of risk in the AI data center business.

Source: TechCrunch AI