❯ Nscale reportedly plans an IPO at a $35 billion valuation as its Norway data center falls behind schedule

Construction running lateTechstrong IT reported on October 15 that Nscale is preparing to go public at a target valuation of about $35 billion, while its flagship Glomfjord, Norway, data center is about six months late, with 6.4 of a planned 30 megawatts running. Reported causes include cooling leaks, permitting hurdles, construction delays and an on-site fire; a 220-room floating hotel was brought in to house workers.

Selling computeNscale supplies AI training and inference compute to hyperscalers, frontier labs and businesses, building data centers, installing GPUs, connecting power and building its own power plants. It operates sites in Glomfjord and Narvik in Norway, Loughton in the UK and Texas, plus partner sites in Portugal, Iceland and elsewhere. Customers buy usable compute, so revenue starts only once sites are built.

Borrowing before the IPOIn September Nscale announced $3.36 billion of convertible notes led by Third Point, with Nvidia, Apollo funds, Citadel, the Abu Dhabi Investment Council and others, converting into shares at IPO. $2.36 billion arrived at closing; Nvidia’s $1 billion is due mid-November. It says it holds more than $103 billion in contracts.

The UK is short on power tooNscale’s Loughton AI supercomputer, targeted for 2027, needs 90 megawatts, about the use of 315,000 homes. According to UK regulator Ofgem’s June data, 315 data centers wait for grid connections with 73 gigawatts of demand, 60% more than the country’s 45-gigawatt capacity.

Contracts depend on data centersTurning $103 billion of contracts into revenue requires sites built and powered on time. With Norway about a fifth complete and the UK site waiting on the grid, customers start training later and revenue shifts back, which is what IPO investors have to price.

▮ SIGNALHowever large an AI cloud company’s contracts, they only count once each data center is built; construction progress is revenue progress.