Nvidia is in talks to put roughly $2 billion into a pre-IPO round for Nscale, a British AI cloud firm that is also one of Nvidia's own GPU customers. The arrangement echoes Nvidia's earlier equity stake and anchor order in CoreWeave, and it comes as Nscale tells investors its contracted revenue has roughly doubled to $103 billion in a single month.
Nscale, a two-year-old British AI cloud computing firm, is negotiating to raise up to $3.5 billion ahead of a planned U.S. stock listing. Nvidia is expected to supply about $2 billion of that financing, with hedge fund Third Point leading a separate tranche of convertible notes and Goldman Sachs running the process.
The arrangement would make Nscale's chip supplier one of its largest shareholders just weeks before the company asks public investors to back a valuation roughly double its last private round.
Nvidia's money comes with a built-in customer
Nscale has ordered about 194,000 of Nvidia's upcoming Vera Rubin GPUs for its data centers. Nvidia investing directly in the company placing that order blurs the line between a chip sale and an equity stake, since the revenue Nscale eventually books from renting out those chips flows partly from cash Nvidia supplied in the first place.
This isn't a new playbook. Nvidia used a similar structure with CoreWeave before that company's 2025 IPO, taking an equity stake and placing a $250 million anchor order inside the listing itself. Critics labeled that arrangement circular financing at the time, and Nvidia has since applied a similar approach to other infrastructure buyers including Nokia and Nebius.
Microsoft and Google already said no to this deal
Nscale's biggest contract, a six-year, $45 billion deal to supply computing capacity to Anthropic, followed two earlier offers to bigger customers. Microsoft and Google were both in talks for that same capacity at Nscale's West Virginia campus before Anthropic took it. Microsoft walked away during a review of its data center portfolio, and Google passed after reassessing its own spending plans.
That history matters more than the headline number. A contract that two of the world's best-capitalized cloud companies considered and turned down is now the centerpiece of the pitch Nscale is making to public market investors, who have far less insight into Nscale's operations than Microsoft and Google had when they walked away.
The contract backlog doubled in a single month
Nscale is telling prospective investors its total contracted revenue is now about $103 billion, roughly double the $51 billion figure reported a month earlier. Almost all of that jump traces to the Anthropic agreement signed in late August. But Nscale's actual revenue reached just over $100 million in Q2 2026, up from about $37 million the quarter before — a backlog built on multi-year contracts is not the same as revenue already collected.
The company was valued at $14.6 billion in March following a $2 billion Series C round with backers including Dell, Nokia and Citadel alongside Nvidia. The new convertible notes are capped at a $30 billion valuation, roughly double that March figure. An IPO could raise another $3 billion on top of the private financing, with a listing possibly coming as soon as this month.
Chipmakers are becoming their customers' bankers
Nvidia's stock showed no unusual reaction to the Nscale report, a reminder that $2 billion is a rounding error for a company with a market capitalization in the trillions.
The more useful comparison is CoreWeave, whose shares surged more than 350% after its Nvidia-backed IPO before losing roughly half their value months later, evidence that vendor-financed listings can reverse just as sharply once the backing is no longer novel. Nscale won't be the last infrastructure company asking public investors to underwrite a valuation built on contracts its own suppliers helped finance.
Source: TheStreet
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