Nvidia-Backed Nscale Secures $1.1 Billion in Funding

Nscale, a British artificial intelligence infrastructure firm, is poised to significantly expand its European footprint after securing $1.1 billion in a Series B funding round. This substantial investment underscores the escalating demand for AI-ready data centers and the strategic importance of computational power in the burgeoning AI race.

The London-based company’s funding round was spearheaded by Aker, the prominent Norwegian industrial investment firm. Notably, the round also drew significant participation from key technology players, including Nvidia, Nokia, and Dell, signaling a strong industry validation of Nscale’s business model and technological capabilities.

This influx of capital arrives at a critical juncture, as companies like OpenAI, Microsoft, and Google are locked in fierce competition to develop and deploy increasingly sophisticated foundation AI models. These models require immense computational resources for both training and operation, creating a bottleneck that specialized infrastructure providers like Nscale are uniquely positioned to address.

Nscale’s rise has positioned it as a pivotal element in the UK’s broader ambition to establish itself as a global AI hub. Recent announcements of multi-billion dollar AI infrastructure projects involving Nscale, backed by giants like Microsoft, Nvidia, and OpenAI, underscore the strategic importance of the firm to Britain’s technological future.

“We are creating one of the largest global [infrastructure] platforms of its kind – purpose-built to meet surging demand and unlock breakthroughs at unprecedented scale,” stated Josh Payne, Nscale’s CEO and co-founder, highlighting the company’s ambitious vision.

“This allows Nscale to provide our customers access to scarce, and highly sought after, compute capacity and rapidly accelerate the build-out of secure, compliant and energy-efficient AI infrastructure,” Payne added. The focus on security and energy efficiency is particularly salient, given growing concerns about the environmental impact of large-scale AI deployments and the need to protect sensitive data processed within these systems.

Nscale’s origins trace back to Arkon Energy, an Australian cryptocurrency mining firm, from which it was spun out in 2023. The pivot reflects a strategic shift towards a more sustainable and scalable business model driven by the booming demand for AI-centric data centers. The company’s experience in managing high-density computing infrastructure during its cryptocurrency mining phase provides a valuable foundation for its current endeavors.

A significant portion of Nscale’s strategy revolves around its collaboration with OpenAI in the UK and Norway. As part of OpenAI’s “Stargate” project – a substantial investment in dedicated computing infrastructure – Nscale is building cutting-edge data centers. The Series B funding will reportedly accelerate the deployment of these European Stargate projects. Analysts suggest that these partnerships provide Nscale with a guaranteed revenue stream and a valuable opportunity to showcase its technological capabilities.

The scale of Nscale’s ambition is evident in its commitment of $1 billion to the Norwegian project, targeting an eventual deployment of 100,000 Nvidia GPUs by 2027. Meanwhile, the UK site is slated to house 8,000 GPUs in its initial phase early next year, with plans for potential expansion to approximately 31,000 GPUs. This strategic deployment of GPU resources is crucial for supporting the computationally intensive tasks associated with AI model training and inference.