IT Home News on November 5th: According to a report by the British "Financial Times," Nscale, the UK's most highly valued artificial intelligence startup, is facing new challenges in its bid to go public with a valuation of $35 billion (Note from IT Home: The current exchange rate is approximately 233.99 billion yuan). The company failed to reach a potential new deal with Microsoft, which could involve a sum of several hundred billion dollars.
According to three people familiar with the matter, this American software giant has given up an option that would have allowed it to more than double the scale of its existing contracts and continue to rent the computing power of Nscale located in a data center park in Texas, USA.
This means that Nscale must find new customers for the park; otherwise, there could be a loss of several billion dollars in revenue in the future. The board of directors of Nscale includes former Meta executive Sheryl Sandberg and former British Deputy Prime Minister Sir Nick Clegg.
At this time of setback, this British company, which has received investment from NVIDIA, is preparing to launch its initial public offering (IPO) this year ( IPO ). The company is led by Josh Payne ( Josh Payne ), who previously engaged in cryptocurrency mining operations in Australia.
However, investors are becoming increasingly cautious about the high debts incurred in the construction of artificial intelligence infrastructure, especially more vigilant towards so-called "new cloud" enterprises such as CoreWeave and Nebius ( Neocloud ).
During the mid-term elections in the United States on Tuesday local time, the incumbent Republican candidates suffered setbacks. Public dissatisfaction with the large-scale construction of artificial intelligence data centers across the country is considered to be one of the reasons for this. Democratic governors taking office in several states, including Texas, have called for an immediate suspension of data center construction.
For new cloud service providers, obtaining new long-term business contracts is of paramount importance. This not only relates to whether the company can continue to obtain loans but also directly affects their ability to provide financing for data center construction.
Nscale also faces other challenges. Earlier this year, Microsoft withdrew from a deal worth $3 billion (about 20.056 billion yuan at current exchange rates), which involved planning to rent computing power from a data center located in Essex County, UK, owned by Nscale. In addition, the company's flagship data center project in West Virginia, USA, has encountered construction delays and opposition from local residents. This project is a core component of a $45 billion (about 30.0844 billion yuan at current exchange rates) computing power cooperation agreement between Nscale and Anthropic.
Nscale Achieved revenue of $141 million (approximately 943 million RMB at current exchange rates) in the first half of this year, but incurred a net loss of $1 billion (approximately 668.5 million RMB at current exchange rates). Meanwhile, the company is also developing data center projects in Portugal and Norway.
Nscale indicates that the company is currently expected to secure approximately 10GW of potential power capacity, which is equivalent to the annual electricity consumption of nearly all households in the UK.
In the IPO prospectus, Nscale indicates that its project located in Ward County, Texas (Ward County) will gradually put 1.2GW of computing power capacity into operation. Of this, approximately 500MW comes from a data center built on Nscale's own land, while the remaining 700MW is planned to be provided by a nearby project developed by the cryptocurrency mining company Ionic Digital.
Nscale has the pre-emptive right to find customers for the projects under Ionic Digital, and therefore can benefit from the computing power leasing transactions related to that park.
In October 2025, Nscale announced an agreement with Microsoft to lease approximately 240MW of computing power capacity to Microsoft for the Ionic Digital project. At that time, Microsoft also obtained the option for an additional 700MW of capacity in the second phase.
However, Nscale clarified to The Financial Times this week that the capacity involved in this option is actually close to 500MW, rather than the previously announced 700MW, and it corresponds to renting additional computing power within Nscale's own data center campus. People familiar with the matter said that Microsoft ultimately decided not to exercise this option.
In September this year, Nscale reached an agreement with robotics company Figure to lease a portion of the computing capacity of its own data center in Ward County. Sources also revealed that the company has signed undisclosed cooperation agreements with other enterprises located at the same site.
A person close to Nscale stated that the company is currently in negotiations with several other potential clients regarding the leasing of computing power in their own data center parks.
However, according to the documents submitted by Ionic Digital to the U.S. Securities and Exchange Commission (SEC), Nscale has not yet secured a power supply for the remaining computing capacity of the Ionic project, and Microsoft still retains the pre-emptive right to purchase for that project.
Relevant regulatory documents indicate that Ionic Digital retains the right to provide the newly added power capacity to other artificial intelligence enterprises, commercial customers, or cloud infrastructure companies, and may also use it for its own business.
A person familiar with the matter stated that Microsoft's decision to no longer rent additional computing power for the Texas project will not affect the order reserve of Nscale amounting to $103 billion (approximately 688.598 billion yuan at current exchange rates).
In addition, Nscale is also in talks with Anthropic, planning to expand the existing cooperation between the two parties. They intend to rent another data center with a capacity of 460MW for the largest project in West Virginia.
