Nvidia-backed cloud firm Nscale reports wider loss in new share sale filing

Nvidia-backed cloud company Nscale has released updated paperwork for a share sale on the stock market, showing a bigger financial loss. The London-based firm reported a third-quarter net loss of 1.69 billion dollars on revenue of 307.5 million dollars. Revenue grew by 1,344 percent compared to the same time last year. The net loss grew from 1.02 billion dollars in the second quarter, when revenue was 140.6 million dollars.

Business Setbacks

Nscale filed to offer shares to the public in September but had not updated its paperwork since then. The company did not state how much money it plans to raise on the New York Stock Exchange. The firm has faced public challenges recently. Microsoft walked away from a planned data center deal with Nscale in England. Darren Hardman, who leads Microsoft in the U.K. and Ireland, stated in October that the choice came down to Nscale's ability to get enough electricity. Reports also indicate Microsoft decided against renewing a contract with Nscale in Texas. Even so, Nscale noted in its filing that it expects Microsoft to remain a major customer later on. Meanwhile, Nscale is growing its business with Anthropic, which also plans to go public. Anthropic used its right to buy extra computing power at an Nscale site in West Virginia in late September.

Market Turmoil

The broader cloud rental market, which rents out chips like Nvidia graphics processing units, has seen major shifts. Nvidia CEO Jensen Huang resigned on Thursday after admitting to an affair with a woman linked by intelligence agencies to a Chinese spy, prompting an Nvidia investigation. Investor pressure hit Nscale rival CoreWeave in October, though its stock rose nearly 25 percent on Wednesday before falling about 7 percent on Thursday following Huang's exit. Shares of another cloud firm, Nebius, dropped roughly 17 percent on Thursday after the company gave weak full-year forecasts.

Context

Cloud computing companies that specialize in renting out powerful graphics chips face high operational costs and heavy reliance on a few major tech partners. Securing a steady power supply is a major operational challenge for large data centers. These firms operate in a fast-moving market tied closely to the broader artificial intelligence industry.