Nscale IPO hinges on $88B in contracts from two customers

British AI infrastructure provider Nscale is preparing to go public with a business model that concentrates extraordinary risk: 85% of its $103 billion contract backlog comes from just two customers, according to its IPO filing first reported by TechCrunch.

The company, which spun out of Australian cryptocurrency miner Arkon Energy two years ago, has secured a $43.8 billion agreement to supply Microsoft with compute capacity through 2033 and a $44.6 billion deal with Anthropic. The Anthropic contract carries significant contingencies—it requires Nscale to obtain financing and meet unspecified milestones the filing describes as "stringent." Anthropic retains the right to cancel if those conditions aren't met.

The interconnected AI infrastructure stack

Nscale's customer concentration reflects a broader pattern in AI infrastructure. A recent analysis by credit hedge fund Sona Asset Management, featured in the Financial Times, found that competitor CoreWeave generates 67% of its revenue from Microsoft, while data center builder Applied Digital derives 67% from Oracle and 30% from CoreWeave itself.

Sona's research noted this interconnectedness isn't inherently problematic, but it creates vulnerability: a single strategic shift or setback among major players can ripple across the entire sector.

Financial snapshot and valuation

Nscale plans to list on the New York Stock Exchange seeking a $35 billion valuation and aims to raise $3 billion in the offering, according to reports from the Financial Times and Bloomberg. The company reported $140.6 million in revenue for the six months ending June 30, up sharply from $10.4 million a year earlier. Net losses expanded to $1.02 billion from $369 million in the same period.

Earlier this month, major investor Nvidia agreed to provide $1 billion in convertible debt as part of a $3.1 billion financing package. Nscale was valued at $14.6 billion during its $2 billion Series C round led by Aker ASA and 8090 Industries.

Why it matters

Nscale's IPO will serve as a critical test of public market appetite for AI infrastructure plays built on concentrated customer relationships. While the company has secured massive long-term contracts, the heavy dependence on Microsoft and Anthropic—combined with contingencies that could void the Anthropic deal—presents execution risk that traditional diversified infrastructure companies don't face. The outcome will signal whether investors view customer concentration as acceptable in exchange for exposure to AI's compute buildout, or as a red flag that outweighs the sector's growth potential.

The company operates data centers in Norway, Portugal, Texas, and West Virginia. Its board includes former Meta executives Sheryl Sandberg and Nick Clegg, along with former OpenAI executive Fidji Simo. Competitors include CoreWeave, Nebius, Lambda, and Crusoe, which recently raised $3.9 billion at a $30.9 billion valuation.

Details of Nscale's IPO filing were first reported by TechCrunch.