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Nscale's IPO filing shows 85% of contracts tied to Microsoft, Anthropic

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Nscale's IPO filing shows 85% of contracts tied to Microsoft, Anthropic

Nscale, a British neocloud spun out of Australian cryptocurrency miner Arkon Energy two years ago, has filed to go public on the NYSE. The filing shows the company has amassed over $103 billion worth of contracts, but about 85% of that total comes from just two deals: a $43.8 billion agreement to supply Microsoft with compute through 2033, and a $44.6 billion supply agreement with Anthropic.

The Anthropic deal carries a catch the filing itself flags. It is contingent on Nscale obtaining financing, and Anthropic retains the right to walk away from or cancel the agreement if Nscale fails to hit milestones that the filing explicitly categorizes as "stringent."

Nscale's reliance on two customers illustrates a pattern across the AI infrastructure sector. A paper by credit hedge fund Sona Asset Management, featured in the Financial Times, found that many AI infrastructure providers depend heavily on a small number of customers. Nscale's competitor CoreWeave generates 67% of its revenue from Microsoft alone, while data center builder Applied Digital derives 67% of its revenue from Oracle and another 30% from CoreWeave. Sona said such interconnectedness is not necessarily a bad thing, but warned that a single setback or strategic shift by a major player could easily ripple through the entire industry.

Nscale plans to list on the NYSE at an expected valuation of $35 billion, according to the Financial Times, and is seeking to raise $3 billion in the offering, according to Bloomberg. The company reported revenue of $140.6 million for the six months ended June 30, up sharply from $10.4 million a year earlier, while net losses jumped to $1.02 billion from $369 million over the same period.

The IPO follows a run of financing activity. Earlier this month, Nvidia, one of Nscale's major investors, agreed to provide $1 billion in convertible debt as part of a larger $3.1 billion financing deal. Nscale was valued at $14.6 billion when it raised a $2 billion Series C round led by Aker ASA and 8090 Industries. Its competitors, besides CoreWeave, include Nebius, Lambda and Crusoe, the last of which said last week it raised $3.9 billion at a $30.9 billion valuation. Nscale runs data centers in Norway, Portugal, Texas and West Virginia, and its board includes former Meta executives Sheryl Sandberg and Nick Clegg, along with former OpenAI executive Fidji Simo.

Key facts

  • Nscale's IPO filing shows about 85% of its $103 billion-plus in contracts comes from two deals: $43.8 billion with Microsoft through 2033 and $44.6 billion with Anthropic.
  • Anthropic's agreement is contingent on Nscale securing financing, and Anthropic can walk away if Nscale misses milestones the filing calls "stringent."
  • Nscale expects a $35 billion valuation on the NYSE and aims to raise $3 billion, after revenue grew to $140.6 million (from $10.4 million) but net losses widened to $1.02 billion (from $369 million) in the six months ended June 30.
  • A Sona Asset Management study cited by the Financial Times found similar concentration at rivals: CoreWeave gets 67% of revenue from Microsoft, and Applied Digital gets 67% from Oracle and 30% from CoreWeave.
  • Nvidia, a major Nscale investor, agreed this month to provide $1 billion in convertible debt as part of a $3.1 billion financing package, after leading investors valued Nscale at $14.6 billion in a $2 billion Series C round.

Why it matters

Nscale's filing is a concrete illustration of how concentrated the AI infrastructure buildout has become: a company with over $103 billion in contracts is, in practice, a bet on the fortunes of two customers, Microsoft and Anthropic. That concentration is not unique to Nscale. The Sona Asset Management study cited alongside it shows CoreWeave and Applied Digital carrying comparable exposure to single buyers, suggesting the entire AI neocloud category has grown by wiring itself tightly to a handful of hyperscalers and labs rather than diversifying its customer base.

Who it affects

Public investors weighing the IPO are the most direct audience, since they would be buying into a company whose revenue depends on two counterparties staying committed. Microsoft and Anthropic themselves are affected as the deals define much of their compute supply strategy. Nscale's competitors, CoreWeave, Applied Digital, Nebius, Lambda and Crusoe, are affected by comparison, since the filing and the Sona study both frame this as an industry-wide pattern rather than a one-off.

How to use it

For anyone evaluating the IPO, the filing's own language is the place to start: it calls the milestones tied to the Anthropic deal "stringent," which is Nscale's own admission that the agreement could unravel. Investors and analysts can weigh the disclosed valuation ($35 billion) and raise target ($3 billion) against the revenue and loss trajectory reported for the first half of the year, and against how much of the $103 billion in contracts sits outside the Microsoft and Anthropic deals, though the filing as reported does not break that remainder down.

How solid is it

The core figures, including the $103 billion contract total, the $43.8 billion Microsoft deal, the $44.6 billion Anthropic deal, and the revenue and loss numbers, are drawn directly from Nscale's own IPO filing, a disclosure document with legal weight. The expected valuation and fundraising target are sourced to the Financial Times and Bloomberg respectively, and the comparative industry figures for CoreWeave and Applied Digital come from a named hedge fund's research as reported by the Financial Times.

Risks and caveats

The central risk is spelled out in the filing itself: Anthropic can cancel its $44.6 billion agreement if Nscale does not meet financing and performance milestones the filing calls "stringent," and the deal is contingent on Nscale securing financing in the first place. The source does not specify what the remaining roughly 15% of contract value consists of, nor whether Microsoft's deal carries any comparable walk-away right, so the full extent of Nscale's exposure beyond the two named deals is not disclosed here. Net losses more than doubled year over year even as revenue grew, which is the backdrop against which investors will weigh the concentration risk.

“stringent”

— Nscale's IPO filing, describing the milestones attached to the Anthropic deal