One week after Holtec pulled its nuclear IPO, blaming what the Financial Times called the market’s sharp turn against the AI data centre economy, Nscale filed its own S-1 to list on the NYSE under the ticker NSCL. The timing is either bold or oblivious, depending on how you read the numbers inside the prospectus.
The headline figures are genuinely striking. Nscale reported $140.6 million in revenue for the first half of 2026, a 1,252% year-over-year increase, alongside a net loss of $1.02 billion. As of August 31, 2026, the company’s infrastructure portfolio included about 25,000 active GPUs and 461,000 active and contracted GPUs, along with five active and twelve contracted data center sites. The $103 billion contract book is the figure that will catch every investor’s eye. The roughly $2.6 billion that is actually active and generating revenue is the one that deserves the closer read.
The Contract Book and Its Conditions
Microsoft and Anthropic together account for roughly 85% of Nscale’s $103 billion in total contract value. Microsoft has signed agreements providing for payments of up to about $43.8 billion through December 2033, while Anthropic signed agreements in August providing for payments of up to approximately $44.6 billion to supply computing power at a planned facility in West Virginia. That West Virginia campus, called Monarch, does not yet exist at scale. Nscale says it has not yet obtained binding commitments for the financing needed to fund the GPU equipment and data center infrastructure required under those contracts.
Anthropic’s agreement is contingent on Nscale obtaining financing, and Anthropic retains the right to walk away from or cancel the deal if Nscale fails to hit milestones that the filing describes as stringent. That is not a minor footnote. When roughly $44.6 billion of the backlog sits with a single counterparty who can exit without liability if milestones slip, the backlog is better understood as a conditional option than a locked revenue stream.
The Mogul Question: Landlord or Middleman?
The neocloud model has a surface appeal that rewards a closer look. Renting GPU capacity on long-term take-or-pay contracts resembles a toll road: steady, contracted cash flows underpinned by customers who have committed to pay regardless of utilization. Nscale says it operates a vertically integrated model, owning or contracting data centers across the US and Europe, managing the power supply, the GPU fleets, and the software layer that ties it together. Vertical integration matters: owning the power and the building alongside the chips creates switching costs that pure GPU rental shops cannot offer.
But the picks-and-shovels analogy only holds if the picks are durable. As recently as 2024, hosting a crypto miner accounted for 93% of Nscale’s revenue. That business ended in December 2024, making 2025 the first full year as an AI company. The company is two years old in its current form. Its gross margin is negative: revenue of $140.6 million for the six months ended June 30, 2026 came alongside a net loss of $1.02 billion, widened from $368.9 million in the first half of 2025.
The extent of Nscale’s reliance on Nvidia raises questions about circular financing. The chipmaker is providing funding, in the form of investment, loans, or loan guarantees, to customers who are turning around and sending money back to it in the form of GPU purchases. Nvidia is taking $1 billion of a pre-IPO convertible financing package that Nscale announced in September, and Nvidia has guaranteed approximately $860 million of Nscale lease obligations at a facility in Ward County, Texas. The supplier is also the financier.
What the Valuation Demands
Nscale expects to be valued at $35 billion and is seeking to raise $3 billion in the offering. That is more than double the $14.6 billion valuation from its Series C round earlier this year. CoreWeave, the closest publicly traded peer, posted revenue of $2.575 billion for Q2 2026 alone, more than eighteen times what Nscale generated across the entire first half. At the proposed $35 billion valuation, investors are being asked to pay roughly 125 times annualized revenue for infrastructure that is mostly unbuilt, financed by its own chip supplier, and anchored to two customers holding termination rights.
Per the S-1, Nscale says its forecast funding requirements initially raised substantial doubt about its ability to continue as a going concern. The company says it addressed that through a plan to defer, reduce, or cancel certain capital expenditures, and it later announced a pre-IPO convertible financing package, but it tells you where the company stood before the contracts landed.
The Long-Term Verdict
The case for Nscale rests on one premise: that Anthropic and Microsoft will consume every contracted GPU at the Monarch campus and across Nscale’s European footprint, on schedule, for years. If that premise holds, the contract book converts into cash flows that could justify a fraction of the asking valuation. If the neocloud prices well, it sets a valuation benchmark and a tailwind for the much bigger listings expected from Anthropic and OpenAI.
A disciplined long-term investor would not dismiss the opportunity outright. The demand for GPU infrastructure is real, the customer relationships are with two of the best-capitalised AI labs on earth, and vertical integration offers something CoreWeave’s pure-rental competitors cannot easily replicate. But at $35 billion, investors are funding a construction project, not buying a proven compounder. The contracts are conditional. The infrastructure is unfinanced. The company has been an AI business for less than two years. Owning the picks is a fine strategy. Paying 125 times revenue for picks that have not yet been forged is a different proposition entirely.
