Nscale seeks about $3.5 billion in pre-IPO funding, source says

Nscale is in talks to raise about $3.5 billion in pre-IPO funding, according to a source familiar with the matter, in a fundraising effort that could give the cloud infrastructure provider fresh backing ahead of a listing.

The company intends to sell as much as $1.5 billion in convertible notes to a group of investors and is seeking about $2 billion from Nvidia, the source said. Goldman Sachs is working on the fundraising, while New York-based hedge fund Third Point is expected to lead the convertible note investment.

The notes are being offered at a double-digit discount to Nscale's IPO price. The discount would adjust up to a valuation of $30 billion, above which the conversion price would remain unchanged, the source said.

Third Point and Nvidia did not immediately respond to Reuters requests for comment. Nscale and Goldman Sachs declined to comment. Bloomberg News first reported the development. The discussions over the investors and the size of the investment remain ongoing and could change.

Nscale was valued at $14.6 billion in March after raising $2 billion in a Series C round. Founded in 2024, it operates data centers, graphics processing units and a software stack for large-scale, GPU-powered artificial intelligence computing. Reuters reported last month that Anthropic had signed a six-year, $45 billion agreement to rent AI computing capacity from Nscale's West Virginia data center campus.