Money-losing Nscale’s $35 billion IPO includes a $3 billion deal with Nvidia and ‘going concern’ worries

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Nscale’s $35 billion IPO

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A peek inside loss-making Nscale’s $35 billion IPO

Nscale, the AI data center provider, filed IPO papers with the SEC late Friday, and the S-1 contains some eye-popping numbers. The company is seeking a $35 billion valuation, according to the FT, even though it loses money.

Nscale’s revenue for the first half of 2026 was $140.6 million, but its net loss was $1 billion. In fact, Nscale’s cost of revenue was $189.6 million, meaning that it failed to make a gross profit because the cost of providing its services exceeded the revenue it generated. 

The company has never made a profit but did show a gross profit of $6.3 million in 2024 on revenues of $19.1 million. Since then, losses have expanded.

In fact, the company warns in its prospectus that management once had “substantial doubt” as to whether the company could continue as a “going concern,” which is the language companies use when they believe there is a risk of bankruptcy. Here is the disclosure:

“Management identified that the Company’s forecast funding requirements included reliance on uncommitted debt and equity financing, which initially raised substantial doubt about the Company’s ability to continue as a going concern. Management has evaluated its ability to defer, reduce or cancel capital expenditure if such financing is not obtained as forecast and has concluded that this plan is probable of being effectively implemented and, if necessary, would provide sufficient liquidity to alleviate the substantial doubt about the Company’s ability to continue as a going concern.”

The company also warns, “we will require additional capital to fund our business” in the future. 

The company is not short of cash, however. On September 15,........

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