From Fortune · Jim Edwards · · 1m 20s
Loss-making Nscale seeks $35 billion valuation
The AI data center company is going public despite never turning a profit and warning of bankruptcy risk.
In brief
The AI data center company is going public despite never turning a profit and warning of bankruptcy risk. Nscale is pursuing a massive IPO valuation while losing money on every dollar of revenue and disclosing serious doubts about its ability to survive without continued outside funding. Originally reported by Fortune.
Nscale files for $35 billion IPO
The AI data center provider filed IPO papers with the SEC seeking a $35 billion valuation, despite losing $1 billion in the first half of 2026 on just $140.6 million in revenue.
Losing money on every sale
Nscale's cost of revenue was $189.6 million against $140.6 million in sales, meaning it failed to make a gross profit. The company has never been profitable.
Bankruptcy warning in prospectus
Nscale disclosed that management had "substantial doubt" about the company's ability to continue as a going concern, the language used when bankruptcy risk exists. The company warns it will need additional capital to fund operations.
“we will require additional capital to fund our business”
Nvidia injects $3.1 billion
On September 15, Nvidia provided $3.1 billion through convertible loan notes. Nscale also disclosed $56.4 billion in remaining performance obligations over the next seven years.
High-profile board includes Clegg, Sandberg
Non-executive directors include former UK deputy prime minister Nicholas Clegg and former Meta COO Sheryl Sandberg. CEO Josh Payne earned $23.2 million in compensation.
The one thing
Nscale is pursuing a massive IPO valuation while losing money on every dollar of revenue and disclosing serious doubts about its ability to survive without continued outside funding.
