Nscale Secures $7 Billion Funding from NVIDIA for AI Infrastructure

Nscale, a London-based AI startup, has rapidly emerged as a key player in the global AI infrastructure market, securing significant investments and partnerships with industry giants. The company, which was previously part of Arkon Energy and focused on cryptocurrency mining infrastructure, has pivoted to AI, driven by the surging demand for data centers capable of handling AI workloads.

In a surprising turn of events, Nscale has secured nearly 7 billion dollars in new funding from NVIDIA, one of the world's most valuable companies. This investment comes as part of a broader collaboration announced in a joint press release, where Nscale was named as an AI infrastructure partner by NVIDIA, Microsoft, and OpenAI. The companies are working together to advance AI infrastructure in the UK.

Nscale's rapid ascent is particularly noteworthy given that it was only two years ago that the company was a new startup with no external funding and had not officially announced its formation. In December of last year, Nscale ended its "stealth mode" and announced the completion of a 155 million dollar Series A funding round. The company has since become a core player in the AI market, with plans to develop large-scale AI infrastructure in Europe, specifically in Norway, where Akers, one of the partners, is headquartered.

Nscale's collaboration with OpenAI has already made headlines. In July, the two companies announced plans to build an AI data center in Norway, branded as "Stargate," with Nscale committing to invest 1 billion dollars. The goal is to equip the data center with 100,000 NVIDIA GPUs by 2027. This project is part of a broader initiative to address the growing demand for AI infrastructure in Europe, where the market is highly fragmented and lacks sufficient computational power.

Nscale's business model is similar to that of CoreWeave, another company that provides end-to-end AI infrastructure services by combining data center space, power resources, a large number of GPUs, and proprietary software. CoreWeave, which went public this year with a market capitalization of 58 billion dollars, also has roots in cryptocurrency mining, having initially purchased NVIDIA GPUs for Ethereum mining before transitioning to the AI sector.

Nscale's CEO has emphasized the company's commitment to solving two major challenges in the European AI market: insufficient computational power and market fragmentation. The CEO highlighted that large-scale AI infrastructure projects are essential for deploying computational capabilities, enabling ecosystem participants to develop AI products, and driving economic growth.

Nscale's rapid growth trajectory includes several key milestones. In May of last year, the company ended its stealth mode and announced its first public partnership with Open Innovation AI in the UAE, planning to deploy 30,000 GPUs. Around the same time, Nscale acquired Kontena, a company focused on high-performance computing data centers. The following month, Nscale partnered with Singtel, an Asian telecommunications company, to launch "GPU as a Service" (GPUaaS) for clients in Europe and Southeast Asia.

In December 2024, Nscale achieved a significant funding milestone with a 155 million dollar Series A round led by Sandton Capital Partners, with participation from Kestrel0x1, Blue Sky Capital Managers, and Florence Capital. The company revealed that its AI data center's computational power had increased from 300 megawatts the previous year to 1.3 gigawatts, with a target of operating 350,000 GPUs by the end of 2027.

Nscale's ambitious plans include deploying up to 4,000 additional GPUs in its Norwegian data center and developing up to 180 megawatts of computational power in its existing business portfolio. The company aims to deploy 50,000 GPUs by the end of 2025 and increase this number to 150,000 by the end of 2026.

Nscale's rapid rise and significant investments underscore the growing importance of AI infrastructure and the intense competition in the AI market. The company's partnerships with major tech giants and its focus on addressing key challenges in the European AI market position it as a potential leader in the industry.