Nscale raises $3.36bn. It'll list in New York, not London
London-based AI cloud firm Nscale has raised $3.36bn ahead of a New York listing. Its flagship UK data centre, meanwhile, may wait until the 2030s for power. That's the British AI story in one week.
Nscale, the London-based AI cloud company, said on Friday it has raised $3.36bn ahead of a stock market listing. The listing won't be in London. It will be on the New York Stock Exchange, where Nscale filed its paperwork last week at a valuation reported to be as high as $35bn.
It's a remarkable number for a company founded in 2024. It lands in the same week OpenAI's George Osborne warned that local opposition to data centres is holding Britain back, and that Nscale's own flagship UK site has been told it may wait until the 2030s for power.
You can either choose to have these datacentres in Ohio and Georgia and Michigan, which is where they're all being built … we don't allow these things to be built. They're going to be built elsewhere.
— George Osborne, OpenAI
A pre-IPO loan that becomes shares
The money comes as convertible notes: loans that turn into shares when Nscale floats. According to Nscale's announcement, $2.36bn is available now, led by the hedge fund Third Point, with Apollo, Citadel and the Abu Dhabi Investment Council among the backers. A further $1bn is due from Nvidia in mid-November. The Next Web reports the notes convert at a double-digit discount to the IPO price, so these investors are buying in cheaper than the public will.
"This marks a milestone for Nscale as we continue scaling our full-stack AI infrastructure to meet unprecedented global demand," said founder and chief executive Josh Payne.
Nscale, which TechCrunch says was spun out of the crypto miner Arkon Energy, is what the industry calls a "neocloud": a company that rents out racks of Nvidia chips to AI firms rather than running a general-purpose cloud like Amazon or Microsoft. In March it raised $2bn at a $14.6bn valuation. Now it's reportedly aiming at more than double that.
Big contracts, bigger losses
The filing, as reported by TechTimes and The Next Web, shows why investors are both excited and nervous:
- Revenue: $140.6m in the first half of 2026.
- Net loss: $1.02bn over the same six months.
- Contracted backlog: $103.4bn, mostly from Microsoft and Anthropic.
- Concentration: 52% of first-half revenue came from a single customer.
That backlog is the whole pitch. Contracts are promises, though, and turning them into revenue means building and powering data centres that don't yet exist. Renaissance Capital lists five operating sites, all in Europe: three in Norway, one in Portugal and one in Iceland. None is in the UK.
British company, American listing, Norwegian power
Nscale told City AM it picked New York because "the US offers a deeper pool of capital and more investors with a specialist understanding of AI infrastructure." It says it will stay UK-headquartered and British-domiciled after the float, and City AM reports it plans a retail offer so British investors can buy in on institutional terms. That's a nice touch. It's still another British tech name choosing Wall Street, which is why Airtel Money's London IPO plans, covered here recently, stand out.
Then there's the site that was supposed to anchor Britain's AI ambitions. Nscale's £2bn Loughton data centre in Essex, with Microsoft signed as its anchor tenant, needs up to 90MW of power. Resultsense, citing Morning Intelligence and The Guardian, reports it now faces a wait for a grid connection until the early-to-mid 2030s, against an original 2027 target. Nscale says it remains "fully committed" and is looking at generating its own power on site. Its Stargate UK partnership with OpenAI at Cobalt Park on Tyneside had already stalled by April, according to Business Matters.
Osborne, now OpenAI's head of AI for countries, told the Big Brue festival in Somerset that "it's really hard to build a datacentre" in Britain and that much opposition "is very much like 'not in my back yard'". The Guardian notes protests in London, Devon and Edinburgh over landscape, housing and resource use. But Loughton isn't being held up by angry neighbours. It's waiting for electricity.
To be fair to Nscale
Nscale has done something few British tech companies manage: signed deals with Microsoft and Anthropic worth tens of billions and persuaded Nvidia to back it twice. Going to New York for a multibillion-dollar raise is a practical call about where the capital sits, not a snub. And it's building where power is cheap and available, which is exactly what a sensible business would do. The problem at Loughton is the grid, not the company.
Mind the hype. Britain has the AI champion. It just can't plug it in.
Sources: TechCrunch, Nscale (PR Newswire), The Next Web, TechTimes, Renaissance Capital, City AM, Silicon UK, The Next Web (Loughton), Resultsense, Business Matters, The Guardian (via inkl)