Nscale Looks to Raise US$2.7bn to Build AI Infrastructure
Nscale seeks the funding required to build AI infrastructure.
The company has appealed for US$2.7bn to build said infrastructure, off the back of a pending partnership with ByteDance, the parent company of TikTok. According to a Bloomberg report, the money would enable Nscale to build out data centres worldwide filled with Nvidia Corp. chips. These would then be rented out by companies such as ByteDance to train and operate AI models.
The Bloomberg report suggests that US$1.8bn of the financing would be a private credit deal led by Goldman Sachs, with the document stating that Nscale is seeking another US$900m in preferred equity and convertible shares.
“We recognise that the increasing demand for AI and keen interest in our rapidly evolving industry are generating a lot of attention for Nscale, but we do not comment on speculation,” Nscale said to Bloomberg via an emailed statement.
Nscale eager to expand AI compute
Currently, Nscale is marketing a debt deal and is finalising a potential US$2bn contract with ByteDance, according to the document that Bloomberg has seen.
A spokesperson for ByteDance said to Bloomberg the two companies have had some discussions about expanding their business together but that talk of a US$2bn contract “significantly overstates the scale of any possible cooperation.”
The news comes in the wake of ByteDance expanding its data centre operations and is currently in talks to develop a facility in Brazil. The discussions are supposedly focused on a 300MW data centre, with potential for future expansion up to 900MW in a second phase. Total demand for the project could approach 1GW, sources told Reuters.
These loans could be attractive to investors, Bloomberg says, given that they include the promise of Nvidia chips the company plans to purchase, in addition to the data centre leases and contracts with customers.
How Nscale is currently growing
As the race to build AI infrastructure continues full steam ahead, technology companies are eager to gain access to graphics processing units (GPUs) and data centre capacity to remain competitive.
Against this backdrop, Nscale emerged in May 2024 from stealth and not only owns its data centres, but develops GPUs and the software stack provided to customers. The company, as a vertically-integrated AI infrastructure provider, secured US$155m in Series A funding in December 2024 to expand its operations across Europe and North America.
The funding round was led by Sandton Capital Partners and included Kestrel, Bluesky Asset Management and Florence Capital as participants.
At the time, Nscale shared that the funding would support the company in expanding its data centre pipeline, which grew from 300 megawatts (MW) to 1.3 gigawatts (GW) between May and December 2024, whilst also accelerating the deployment of large-scale GPU clusters.
These clusters are used for AI model training – the process of developing AI systems using large datasets – fine-tuning and inferencing.
The company also plans to develop 120MW of capacity in 2025 across key sites in Ohio, Texas, the UK and Norway.
Speaking at the time, Nscale CEO Josh Payne shared: “Nscale manages every layer of infrastructure in the value chain to meet the intensive needs of large-scale AI customers. The largest risk to the market's ability to scale is the large contiguous tranches of electricity required to power these large GPU superclusters.
“Nscale has a 1.3GW pipeline of sites in our portfolio, which allows us to design from the ground up, the data centre, the supercluster and the cloud environment end-to-end for our customers.”
Explore the latest edition of Data Centre Magazine and be part of the conversation at our global conference series, Tech & AI LIVE.
Discover all our upcoming events and secure your tickets today.
Subscribe to our Weekly Newsletter for the latest insights, trends and expert analysis.
Data Centre Magazine is a BizClik brand