Nscale raises $3.36B pre-IPO convertible round led by Third Point, targets $35B NYSE valuation

TLDR

• London-based "neocloud" Nscale raised $3.36 billion in convertible note financing ahead of its planned US IPO, led by hedge fund Third Point.¹
• $2.36 billion is available immediately; an additional $1 billion commitment from existing investor Nvidia lands in mid-November.¹²
• The round follows Nscale's IPO filing seeking a valuation of up to $35 billion on the NYSE, against $103 billion in contracted value but a $1.02 billion net loss in H1 2026.³
• Nvidia's stake echoes its earlier $2 billion investment in rival neocloud CoreWeave, feeding scrutiny over circular financing between chipmakers and the data-center operators buying their GPUs.³

Nscale has secured $3.36 billion in financing structured as convertible loan notes, with the round led by hedge fund Third Point and automatically converting to equity once the company completes its planned US IPO.¹² An initial $2.36 billion is available at closing, and Nvidia — already an Nscale investor — is committing a further $1 billion due in mid-November.¹ The financing also drew participation from funds managed by Apollo, Citadel, Hudson Bay Capital, the Abu Dhabi Investment Council, 8090 Industries, Davidson Kempner, Qube Research & Technologies, Wellington Management, Ghisallo Capital Management, LionTree Investment Fund and Javelin Venture Partners, with Goldman Sachs acting as placement agent.¹

Nscale is a two-year-old "neocloud" — a vertically integrated AI infrastructure operator that builds power plants, liquid-cooled data centers and GPU clusters and rents out the resulting compute — spun out of Australian crypto miner Arkon Energy and run by founder and CEO Josh Payne from London.¹³ The company filed IPO paperwork last week seeking a valuation of up to $35 billion, backed by more than $103 billion in contracted value, even as its S-1 disclosed a $1.02 billion net loss for the six months to June 2026 and flagged "substantial doubt" about its ability to continue as a going concern.³

Nvidia's role goes beyond this one check: it is Nscale's largest supplier, an existing shareholder, and — through the new convertible notes — soon to be a still-larger one, mirroring the $2 billion investment Nvidia made in CoreWeave, another neocloud, earlier in 2026.³ CEO Jensen Huang has been explicit that Nvidia's backing keeps neoclouds like Nscale and CoreWeave in business, a pattern that has drawn growing scrutiny over "circular" AI financing — chipmakers funding the very customers that buy back their GPUs.³

Why it matters: A $3.36 billion pre-IPO round anchored by a hedge fund and Nscale's own chip supplier shows just how much external capital — and how much of it Nvidia's own — is now underwriting the AI data-center buildout ahead of public markets even getting a look.