Nscale raises $3.36 billion in convertible note ahead of $35 billion NYSE debut

British neocloud provider Nscale announced on Friday that it has closed a $3.36 billion financing package structured as a convertible note, a move that clears a major hurdle on the path to its initial public offering later this year. The funding, which is being positioned to convert into equity at the time of the IPO, underscores the scale of capital required to build the next generation of AI-focused data centers.

The round was led by hedge fund Third Point, which committed $2.36 billion that is available to Nscale immediately. An additional $1 billion will be contributed by existing backer Nvidia, with the funds slated for delivery in mid-November. The convertible notes will automatically turn into shares once the company lists on the New York Stock Exchange, aligning the interests of early investors with those of future public shareholders.

Nscale filed its IPO paperwork last week and, according to the Financial Times, is expected to debut on the NYSE with a valuation of roughly $35 billion. Bloomberg reports that the company is targeting a $3 billion raise in the offering itself. The firm, which was spun out of Australian cryptocurrency mining outfit Arkon Energy two years ago, has already secured more than $103 billion in contracts, as disclosed in its filing. Those contracts reflect a broad pipeline of demand for AI compute capacity from enterprises and cloud providers.

The capital infusion will be deployed to expand Nscale’s data-center footprint, including large campuses under development in Norway and West Virginia. Both locations are strategically chosen to tap into abundant renewable energy and favorable regulatory environments, factors that are increasingly decisive for AI infrastructure providers seeking to manage power costs and carbon footprints.

For founders and operators in the AI infrastructure space, Nscale’s financing illustrates the magnitude of investment needed to compete at scale. Convertible notes have become a favored instrument for late-stage companies that want to lock in funding now while preserving flexibility for valuation adjustments at IPO. The involvement of a high-profile hedge fund and a leading GPU maker also signals strong confidence in the long-term economics of AI-centric cloud services.

Looking ahead, market participants will watch how Nscale’s IPO pricing aligns with the $35 billion valuation estimate and whether the $3 billion public raise meets the company’s growth targets. The success of the offering could set a benchmark for other AI infrastructure firms seeking public capital, while also testing investor appetite for large-scale, capital-intensive projects in a sector still defined by rapid demand growth and evolving regulatory scrutiny.