Nvidia's cash could reshape an AI cloud contender

Startups spend years courting brand-name investors to build credibility before they go public. Rarely does one of those investors also happen to be the company's biggest supplier, and in a roundabout way, one of its own paying customers.

Nscale, a two-year-old British AI cloud computing firm, is negotiating to raise up to $3.5 billion ahead of a planned U.S. stock listing, according to Bloomberg .

Nvidia (NVDA) is expected to supply about $2 billion of that financing, with hedge fund Third Point leading a separate tranche of convertible notes and Goldman Sachs running the process .

The arrangement would make Nscale's chip supplier one of its largest shareholders just weeks before the company asks public investors to back a valuation roughly double its last private round.

Nvidia's money comes with a built-in customer

Nscale has ordered about 194,000 of Nvidia's upcoming Vera Rubin GPUs for its data centers.

Nvidia investing directly in the company placing that order blurs the line between a chip sale and an equity stake, since the revenue Nscale eventually books from renting out those chips flows partly from cash Nvidia supplied in the first place.

This isn't a new playbook. Nvidia used a similar structure with CoreWeave before that company's 2025 IPO, taking an equity stake and placing a $250 million anchor order inside the listing itself, according to CNBC .

Critics labeled that arrangement circular financing at the time, and 24/7WallSt reported Nvidia has since applied the same approach to other infrastructure buyers including Nokia and Nebius.

Microsoft and Google already said no to this deal

Nscale's biggest contract, a six-year, $45 billion deal to supply computing capacity to Anthropic, followed two earlier offers to bigger customers, according to Semafor .

Microsoft and Google were both in talks for that same capacity at Nscale's West Virginia campus before Anthropic took it, Semafor reported.

Microsoft walked away during a review of its data center portfolio, and Google passed after reassessing its own spending plans, according to the same report.

That history matters more than the headline number. A contract that two of the world's best-capitalized cloud companies considered and turned down is now the centerpiece of the pitch Nscale is making to public market investors, who have far less insight into Nscale's operations than Microsoft and Google had when they walked away.