Nvidia reportedly set to invest $2 billion in Nscale's $3.5 billion pre-IPO round

Nvidia's reported role in Nscale's funding round

Nvidia is reportedly close to committing around $2 billion to Nscale, a British AI cloud provider, as part of a $3.5 billion funding round being assembled ahead of a US stock market listing, according to a report on dev.to. Goldman Sachs is said to be managing the process, with the hedge fund Third Point leading part of the round through convertible notes.

The round is reportedly capped at a $30 billion valuation, roughly double the $14.6 billion at which Nscale raised in March, a round that counted Dell and Citadel among its backers. An IPO could follow as soon as this month and raise roughly $3 billion more, dev.to reports.

A familiar circular structure

Nscale is not simply a startup seeking cash. It is also a major buyer of Nvidia hardware, having recently placed an order for nearly 194,000 Vera Rubin GPUs, chips built for the computational demands of large AI models. That gives the deal a circular character: money Nvidia invests effectively flows back to the chipmaker when Nscale pays for its hardware. As dev.to notes, critics of this model argue it can inflate perceived demand and revenue for the supplier.

This is not Nvidia's first such arrangement. According to the report, the company used a similar approach with CoreWeave before its IPO, taking an equity stake while securing an anchor hardware order. Comparable structures have appeared in deals involving Nebius and Nokia. For the startup, a chipmaker as a lead investor supplies capital for data center construction and lends credibility ahead of a listing; for the supplier, it locks in a buyer for its most advanced products.

The Anthropic contract behind the numbers

Nscale's growth story centers on a six-year, $45 billion contract with AI research firm Anthropic, signed in late August, under which Nscale will supply the compute capacity Anthropic needs for model development. dev.to reports that the deal nearly doubled the company's contracted revenue backlog in a single month, from $51 billion to more than $100 billion.

Actual revenue is far smaller: roughly $100 million in the second quarter of 2026, up from $37 million the previous quarter. The gap between that figure and the backlog is substantial, and investors will have to judge whether Nscale can build out its data centers on schedule, including its West Virginia campus, and convert signed contracts into cash. Delays in chip delivery or construction could affect those obligations.

Notably, dev.to reports that before Anthropic signed, Nscale offered the same West Virginia capacity to Microsoft and Google. Microsoft declined after reviewing its existing data center portfolio, and Google walked away after reassessing its own spending projections. The two largest cloud providers passing on the deal is a data point public investors cannot easily weigh, since they lack the same insight into Nscale's internal operations.

Governance upgrades before the listing

Nscale has also been strengthening its board ahead of public-market scrutiny. Former Meta executives Sheryl Sandberg and Nick Clegg have joined as directors, adding industry and political weight that the company will lean on as it navigates US listing requirements.

Why it matters

The deal is a clear example of chipmakers acting as bankers to their own customers. The model creates a feedback loop, where vendor capital funds customer purchases that in turn prop up supplier demand and customer valuations, but it also ties the health of both firms together. If Nscale fails to monetize its hardware, Nvidia loses both a client and an investment.

CoreWeave offers a cautionary precedent: its share price surged after listing, then gave back a significant portion of those gains. Whether Nscale's $100 billion backlog survives the discipline of public markets will say a lot about how durable the vendor-financed AI infrastructure boom really is.