IT Home October 19 news: According to Bloomberg, people familiar with the matter said that after a series of market setbacks for artificial intelligence companies, the valuation target Nscale is pursuing for its initial public offering is facing resistance.
According to people familiar with the matter, the data center developer, which has received investment from Nvidia, had originally sought an IPO valuation of about US$30 billion (IT Home note: approximately RMB 201,087 million at current exchange rates). Some of the people said that, considering factors such as the collapse of the IPO plans of Australian AI data center firm Firmus, a group of investors recently proposed that a valuation in the range of US$16 billion to US$19 billion (approximately RMB 107,247 million to RMB 127,355 million at current exchange rates) would be more likely to gain acceptance from subscribers.
Disagreements over valuation have further complicated Nscale's IPO plans. The company said on Sunday that Microsoft, which is both an investor and a customer, has withdrawn from a UK data center partnership project with Nscale; the site had previously suffered repeated delays due to constrained power supply.
As borrowing costs have risen, coupled with growing market uncertainty about the technology's long-term returns, market sentiment toward artificial intelligence infrastructure companies such as chipmakers and cloud computing firms has turned.
There may be a gap in expectations between companies preparing to go public and potential investors, which could force companies to slow down their listing processes. This so-called valuation gap reflects differing judgments between the two sides on the trajectory of financing costs and on whether the difficulties facing the entire industry can be resolved quickly.
According to people familiar with the matter, Nscale formally submitted its application for a US listing on September 18, and although the statutory 15-day waiting period has ended, the company has not yet launched its formal roadshow. The company is currently responding to comments from the US Securities and Exchange Commission on its filing materials and plans to begin the roadshow once the relevant issues are resolved.
According to people familiar with the matter, the relevant discussions are still ongoing, details of the IPO plan may be adjusted, and no final decision has yet been made.
This London-based company completed a pre-IPO funding round last month, raising $3.36 billion (approximately RMB 22.522 billion at current exchange rates). The round was led by Dan Loeb's Third Point, with investors including NVIDIA, Apollo Global Management Inc., Citadel, Hudson Bay Capital, and the Abu Dhabi Investment Council.
The share prices of several of Nscale's peers suffered heavy losses. CoreWeave lost a quarter of its market capitalization last week, with its credit risk indicators climbing to an all-time high; Nebius Group NV's stock price fell 32% over the past two weeks.
Bloomberg News reported in August that Nscale was building data centers in Norway, West Virginia, and other locations, and had originally expected to raise up to 3 billion USD through its IPO (approximately 20.109 billion RMB at the current exchange rate). According to Bloomberg News, the Norwegian project located north of the Arctic Circle was listed by the British data center developer as its flagship site, but construction has fallen six months behind schedule due to cooling system leaks, local regulatory requirements, construction delays, and a fire.
Rising interest rates and the ongoing conflict with Iran have forced smart ring maker Oura and Bamboo Insurance Services Inc. to postpone their IPOs. Investment banks now face multiple overlapping risks, and aside from Anthropic PBC, the IPO market for other companies risks grinding to a standstill. The market expects Anthropic to go public as early as next month, and its listing performance is expected to match or even surpass the record set by SpaceX's IPO, which also puts pressure on Wall Street.