Nscale Raises $3.36 Billion in Convertible Notes Before IPO
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Nscale Raises $3.36 Billion in Convertible Notes Before IPO
Third Point led the round, but Nvidia's $1 billion share of it is a commitment due to arrive in mid-November, after Nscale's initial closing.
Nscale raised $3.36 billion in convertible notes ahead of a planned U.S. stock listing, with $1 billion of that committed by Nvidia, the London-based AI cloud company said Sept. 25.
The financing was disclosed in a press release on Nscale's own site and reported the same day by TechCrunch and Yahoo Finance. Third Point led the round, which closed one week after Nscale filed an S-1 registration statement with the U.S. Securities and Exchange Commission for a proposed New York Stock Exchange listing under the ticker NSCL.
Only part of the $3.36 billion has actually funded
Just $2.36 billion of the total funded at closing on Sept. 25, according to Nscale's announcement. Nvidia's $1 billion commitment is structured separately and is expected to fund in mid-November, roughly seven weeks later. The notes convert automatically into ordinary shares once Nscale completes its IPO, and Nvidia's stake is set to convert into non-voting shares rather than ordinary voting stock.
More than a dozen other investors joined the round, Nscale said, including funds managed by Apollo, Citadel, Hudson Bay Capital, the Abu Dhabi Investment Council, Davidson Kempner Capital Management, Qube Research & Technologies and Wellington Management. Nscale did not disclose a conversion price, a discount to the eventual IPO price, or the total number of shares the notes would represent.
A revenue figure that isn't revenue
Nscale said it has $103 billion in total contracted value, a figure for future revenue under signed agreements rather than cash the company has collected or booked as revenue in 2026. The announcement did not include a 2026 revenue, profit or loss figure, and it did not state a valuation for the new financing. That leaves two numbers an investor would need to price the deal, current revenue and valuation, both absent from Wednesday's release and available, if at all, only inside the S-1 itself.
"This marks a milestone for Nscale as we continue scaling our full-stack AI infrastructure to meet unprecedented global demand," said Josh Payne, Nscale's founder and chief executive, in the announcement.
The size puts Nscale alongside this week's other large private bets
Google's plan to launch TPU accelerators into orbit is a different wager on the same shortage of AI computing capacity that is drawing capital toward Nscale. Closer to Nscale's own stage, Tekever's $580 million Series D valued the drone maker at $6.4 billion this week, a reminder that investors are still writing large late-stage checks for infrastructure-heavy companies outside the foundation-model tier, provided the backlog numbers resemble Nscale's own $103 billion figure.
What would confirm the deal is real
Nscale's S-1 remains under SEC review, and the company has not set a date for an IPO roadshow. The clearest test of Wednesday's announcement is not the $3.36 billion headline number but whether Nvidia's $1 billion tranche actually funds in mid-November as described, before any of the notes convert into shares of a company that has yet to go public.
| Tranche | Amount | Timing |
|---|---|---|
| Funded at closing | $2.36 billion | Sept. 25, 2026 |
| Nvidia commitment | $1 billion | Expected mid-November 2026 |
Sources
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