Welcome to Eye on AI. Beatrice Nolan here. In today’s issue:
- Nscale files to go public.
- How “Effective Altruism” went from fringe philosophy to Trump’s AI villain.
- Google says Gemini 4 is coming soon.
- Altman and Amodei urge the UN to cooperate on AI safety.
- And China is edging ahead in the global AI talent war.
Another day, another billion-dollar IPO.
This time it’s Nscale, the Nvidia-backed “neocloud” that filed for a New York listing last week at a valuation of up to $35 billion, according to the Financial Times.
Nscale is a two-year-old neocloud—a type of company that builds or finances AI-ready data centers and rents out the computing power. It’s headquartered in London and run by founder and CEO Josh Payne. It was spun out of the Australian crypto miner Arkon Energy in 2024. It has since recruited a board that includes former Meta COO Sheryl Sandberg, former U.K. deputy prime minister Nick Clegg, and former Yahoo president Susan Decker.
Per the S-1, the company posted a net loss of $1.02 billion in the six months to June 30, 2026—and at one point, its own management flagged “substantial doubt” about its ability to continue as a going concern.
When I profiled the company back in June, there were already serious questions about the company’s losses running wildly ahead of its revenues. The new filings show the extent of them.
Despite those losses, Nscale is asking Wall Street to value it at as much as $35 billion on the promise that $103 billion in contracts, much of them not yet firm, will turn into revenue on schedule.
Also front and center in the S-1 are the company’s deep links to Nvidia. Nvidia is Nscale’s biggest supplier, one of its investors, and—depending on how the IPO prices—soon to be one of its largest shareholders. On September 15, Nscale signed a subscription agreement for a $3.1 billion financing round, of which Nvidia itself is taking $1 billion in convertible notes or non-voting shares.
Previous filings from Nscale’s own U.K. company accounts in October 2025 showed that Nvidia bought warrants for over 157,945 Nscale shares for $60 million—and in exchange, agreed to guarantee up to $860.3 million of Nscale’s lease obligations at a facility in Ward County, Texas.
In a way, Nvidia has been pretty open about the fact that it’s propping up companies like Nscale. Back in April, Nvidia CEO Jensen Huang said this, referencing both Nscale and CoreWeave, another neocloud company:
“If we didn’t support CoreWeave to exist, these neoclouds, these AI clouds, wouldn’t exist…If we didn’t support Nscale, they wouldn’t be where they are today.“
But the extent of Nscale’s reliance on Nvidia raises questions we’ve seen before 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. In some cases, Nvidia is also investing in the AI companies that are buying data center capacity from the neoclouds. In that case, it’s all Nvidia’s money just passing from one place to another. The rest of us are left trying to work out how much of the AI boom’s growth is real demand versus one company’s balance sheet talking to itself.
Coreweave may foreshadow Nscale’s IPO fate
CoreWeave is probably our best point of reference for how this IPO may go. Similarly, CoreWeave posted an $863 million net loss in 2024—the last full year before its March 2025 IPO, as disclosed in its own S-1. The company also disclosed in that same filing that two customers—Microsoft and a second buyer widely reported to be Nvidia itself—made up 77% of its revenue.
Still, despite a shaky debut—CoreWeave priced below its range and closed flat on day one—the stock went on a huge run, more than doubling within months.
While we’ll have to wait and see how this listing goes for Nscale, there is a question about whether the market is still in the same place as when CoreWeave went live in March 2025.
Earlier this month, a warning from Anthropic’s Dario Amodei about the pace of AI development—echoed by Sam Altman and Elon Musk—helped wipe close to 6% off the semiconductor index in a single session, alongside a spike in Treasury yields that made investors less patient with unprofitable growth stories generally.
Community and political pushback against data centers has intensified globally, with some politicians proposing various bans on the rapid build-out Nscale is relying on. There is also a question of how many loss-making, billionaire-dollar companies the market is going to tolerate. Nscale is also getting ahead of companies like Anthropic and OpenAI in the IPO queue.
Going first may mean Nscale helps to test the waters for later listings by the frontier AI companies. If the neocloud prices well, it sets a valuation benchmark and a tailwind for the much bigger listings expected from Anthropic later this year and OpenAI sometime in early 2027. If Nscale stumbles, it’s a much cheaper way for Wall Street to find out where the AI infrastructure story breaks than waiting for a trillion-dollar name to test it first.
With that, here’s more AI news.
Beatrice Nolan
beatrice.nolan@fortune.com
@beafreyanolan
Before we get to the news: One question we here at Fortune keep returning to as agentic AI accelerates: which companies are finding ways to successfully deploy AI agents at scale and in ways that provide significant business value? And which are just playing around with pilots?
On October 6, from 11:00 AM–12:00 PM ET, Fortune AI editor Jeremy Kahn will explore that question with AI and technology leaders from AXA, Mistral AI, Mastercard, and Accenture during Fortune’s virtual Brainstorm AI session,The Agentic Era: Are Enterprises Keeping Up? We’ll look past the demos to discuss the operational realities of data, security, governance, human oversight, and ROI. Join us for the conversation.
This story was originally featured on Fortune.com