Nscale vows stay in UK despite £35bn US stock market listing
Nscale has vowed to keep Britain at the heart of its global expansion despite choosing New York over London for its blockbuster float, as the AI infrastructure firm looks to turn its UK base into an export hub for computing power.
The Nvidia-backed firm believes jobs and expertise built in Britain can serve customers around the world, City AM understands, with between 400 and 500 UK roles already created as it rapidly scales.
But the London-headquartered company opted for the New York Stock Exchange because the US offers a deeper pool of capital and more investors with a specialist understanding of AI infrastructure, a source close to the company told City AM.
The decision comes despite Nscale pitching its British roots as a competitive advantage in the race to build sovereign AI infrastructure across Europe.
The firm filed for its US initial public offering on Friday and is reportedly targeting a valuation of as much as $35bn, little more than two years after being spun out of Australian crypto mining group Arkon Energy.
It marks another blow to London’s efforts to convince its fastest-growing technology companies to list at home, but Nscale is understood to see its choice of exchange as separate from where the business itself is built.
The company intends to remain UK-headquartered and British-domiciled following the float, a source told City AM, with its ultimate parent staying in Britain.
Nscale believes AI infrastructure could become a significant UK export industry, with British-based employees building and operating systems for international customers rather than serving only the domestic market.
“We’re a London company, but we also want to be a global company”, a source close to the firm said.
Wall Street capital, British AI
Nscale’s decision to turn to Wall Street reflects the huge amounts of money required to build the data centres and power underpinning the AI boom.
The company believes US public markets offer both the deepest pool of capital and an investor base more familiar with AI infrastructure businesses, the source told City AM.
They stressed that the decision was not a judgement on London as a market, which remains attractive for companies with different funding needs, stages of growth and shareholder bases.
Nscale, however, is embarking on one of the most capital-intensive expansion programmes in British tech.
It has around 1.3GW of projects in planning and construction and last month struck a six-year deal worth up to $45bn to supply Anthropic with compute from a vast data centre campus in West Virginia.
City AM understands Nscale is building against contracted demand, with customer agreements typically running for five to seven years and including take-or-pay provisions.
Capital will be deployed in phases as sites move through financing, construction and power supply, with its West Virginia development following a similar model to existing projects, a source said.
The company recorded revenue of $141m in the first half of the year alongside a net loss of around $1bn, much of which stemmed from non-cash charges.
Its March funding round valued the company at around $14.6bn. A $35bn IPO would therefore more than double its valuation in around six months.
Pushing for AI sovereignty
Nscale is meanwhile making its British domicile part of its commercial pitch as European governments push to gain greater control over AI infrastructure.
“We also see a significant and growing opportunity in sovereign AI, as nations increasingly seek to build and control their own AI infrastructure and capability rather than rely on others”, chief executive Josh Payne wrote in its IPO filing.
“Nscale is well positioned to serve this demand as a trusted, sovereign-capable platform. This is particularly true in Europe, where the need for sovereign AI infrastructure is especially acute, and where our British domicile positions us as a natural, trusted partner”.
Nscale’s model is expected to combine huge computing hubs in locations where power is cheaper with smaller “spoke” facilities within individual countries, allowing governments and companies to retain domestic computing infrastructure.
The company also expects to work with Britain’s growing AI start-up sector as its domestic capacity expands, although it declined to discuss prospective customers.
Nscale is already working with Microsoft on plans for an AI supercomputer in Loughton, Essex, while Nvidia has pledged £500m to the firm as part of plans to expand UK computing capacity.
Despite opting for New York, Nscale will also open its IPO to ordinary British investors through a UK retail offer.
The company believes it will be the first British tech firm to use the structure for a US flotation, allowing UK retail investors to participate on the same pricing terms as institutions.
Goldman Sachs, JP Morgan and Morgan Stanley are leading the offering, with no final IPO price or timetable having been set yet.