Nscale listing pushes the limits of AI optimism
MSFT•Nscale is planning a New York IPO at a mooted $30 billion valuation. As of August 31, less than $3 billion of its $103 billion in contracts was active, while only 5% of its planned 461,000 chips were operating.
1. Contracts await capacity
Nscale, a London-based AI data centre operator, has five active server farms and 12 contracted sites in its pipeline. Its take-or-pay agreements had a total value of $103 billion as of August 31, but less than $3 billion was active and generating revenue.
2. Projects and customers
The Monarch Compute Campus in West Virginia is described as Nscale’s most crucial project, with Anthropic as its anchor tenant. Microsoft is a key customer at other sites; agreements with the two companies account for $88 billion of Nscale’s total contracts. Nscale’s IPO filing says it has not secured binding financing commitments for the buildout required under its agreements with Anthropic.
3. Valuation and revenue
Nscale’s contracts average 5.7 years, implying maximum revenue of about $18 billion a year. Assuming half its contracted infrastructure is built and generating income by 2028, the company could expect just over $9 billion in sales that year. The article compares that with CoreWeave and Nebius, which trade at 2.4 and 3 times expected 2028 revenue, respectively, and says Nscale’s hoped-for valuation appears to ask investors for a higher multiple.
