By Prathik Jayaprakash and Anzar Mehraj
Sept 4 (Reuters) - Cloud infrastructure provider Nscale is in talks with potential investors to raise about $3.5 billion in pre-IPO funding, a source familiar with the matter said on Friday.
Nscale intends to sell as much as $1.5 billion of convertible notes to a group of investors and aims to secure about $2 billion from Nvidia, the source said.
Goldman Sachs is working on the fundraising, with New York-based hedge fund Third Point set to lead the convertible
note investment, the person added.
The convertible notes are being offered at a double-digit discount to Nscale's IPO price, the source said. The discount would be adjusted up to a $30 billion valuation, above which the conversion price would remain unchanged, the source said.
Goldman Sachs, Third Point and Nvidia did not immediately respond to Reuters requests for comment, while Nscale declined to comment.
Bloomberg News first reported the development on Friday.
Deliberations on the potential investors and size of the investment are ongoing and could change, the source said.
Reuters reported last month that Anthropic had signed a six-year, $45 billion agreement to rent AI computing capacity from Nscale's West Virginia data center campus.
Nscale was valued at $14.6 billion in March, after raising $2 billion in a Series C funding round.
Founded in 2024, Nscale owns and operates its own data centers, graphics processing units and software stack to deliver large-scale, GPU-powered AI compute.
(Reporting by Prathik Jayaprakash and Anzar Mehraj in Bengaluru; Editing by Joyjeet Das)
