Nscale Aims to Raise $2.7 Billion to Build AI Data Centers with Nvidia Chips
Nscale, a London-based artificial intelligence (AI) infrastructure startup, is looking to raise $2.7 billion to build a global network of data centers optimized for AI model training and operations. The firm plans to equip these centers with Nvidia chips and rent them out to companies in need of advanced AI compute power.
According to a Bloomberg report, Nscale is pursuing a $1.8 billion private credit deal and an additional $900 million in preferred equity and convertible shares. The funding will help Nscale expand its AI infrastructure to meet the soaring demand for AI compute resources.
Expanding AI Infrastructure Globally
Currently, Nscale operates facilities in Norway and Texas, and it has plans to expand with five more data center sites worldwide. These centers will provide the necessary infrastructure for companies developing and deploying large-scale AI models.
Nscale raised $155 million in Series A funding in December 2023 to accelerate its expansion and cater to the increasing need for AI compute resources. This followed an earlier $30 million seed funding round in December 2023.
According to PYMNTS, Joshua Payne, CEO of Nscale, in a press release from December, said, “The AI market is scaling rapidly, and so are we.” Payne emphasized that Nscale manages every layer of AI infrastructure, ensuring that the company can meet the intensive demands of large-scale AI customers, including providing the necessary power for GPU superclusters.
AI Supercomputers Facing Power Constraints by 2030
According to research by Epoch AI, companies building AI supercomputers may encounter power constraints by 2030.
The institute projects that the leading AI supercomputer by that time could require 9GW of power, equivalent to the output of nine nuclear reactors, a scale that surpasses any existing industrial facilities.
If current trends continue, the need for 2 million AI chips for such supercomputers could cost upwards of $200 billion. This projection highlights the importance of securing vast resources, both in terms of capital investment and energy supply, for the future of AI infrastructure.
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Nscale’s Strategic Partnership with ByteDance
Nscale’s proposed funding round could potentially involve a partnership with ByteDance, the Chinese company that owns TikTok, according to the offering document reviewed by Bloomberg.
If secured, this deal would enable Nscale to build a global network of data centers leased to companies like ByteDance, further solidifying its position as a key player in the AI infrastructure space.
