The UK AI computing company Nscale is preparing to list on the New York Stock Exchange. Market attention extends beyond fundraising size and valuation to the company’s heavy reliance on a small number of major clients, once again testing investors’ appetite for AI infrastructure companies.
Two major clients account for the majority of the contracts.
According to the prospectus, since spinning off from Australian crypto mining company Arkon Energy two years ago, Nscale has secured over $103 billion in contracts, approximately 85% of which come from two major deals.
One agreement is for $43.8 billion in computing services to be provided to Microsoft through 2033, and the other is a $44.6 billion supply agreement with Anthropic. In other words, the company’s future revenue expectations are primarily dependent on these two clients.
This agreement from Anthropic also includes conditions. The documents show that the agreement’s execution depends on Nscale securing financing; if the company fails to meet the “strict” milestones outlined in the documents, Anthropic has the right to terminate or cancel the agreement.
AI infrastructure companies commonly face concentration risks.
Nscale’s situation is not an isolated case. As demand for large model training and inference rises rapidly, the AI infrastructure industry is becoming increasingly concentrated among a few cloud providers and model companies.
Sona Asset Management previously noted in a study cited by the Financial Times that many AI infrastructure providers rely on a limited number of clients. For example, CoreWeave generates 67% of its revenue from Microsoft, while data center builder Applied Digital derives 67% of its revenue from Oracle and an additional 30% from CoreWeave.
This structure does not necessarily indicate business vulnerability, but it does mean that once key customers adjust their procurement pace, capital expenditures, or collaboration strategies, the impact could quickly ripple through the entire industry chain.
Planning to raise $3 billion in funding, with losses widening over the past six months
According to the Financial Times, Nscale is planning for a valuation of approximately $35 billion at its IPO. Bloomberg reports that the company aims to raise $3 billion in this IPO.
From a financial perspective, Nscale remains in a high-investment phase. For the six months ended June 30, the company's revenue increased significantly to $140.6 million from $10.4 million in the same period last year; however, the net loss expanded from $369 million to $1.02 billion during the same period.
Earlier this month, Nvidia agreed to provide Nscale with $1 billion in convertible debt financing, part of a larger $3.1 billion funding round. Prior to this, Nscale was valued at $14.6 billion in its $2 billion Series C financing led by Aker ASA and 8090 Industries.
Nscale’s comparable companies include CoreWeave, Nebius, Lambda, and Crusoe. Its data centers are located in Norway, Portugal, Texas, and West Virginia. Board members also include former Meta executives Sheryl Sandberg and Nick Clegg, as well as former OpenAI executive Fidji Simo.