Nscale closed $2.36 billion in pre-IPO notes. Grid power for its planned UK AI supercomputer reportedly may not arrive until the early to mid 2030s.
Two stories about Nscale landed within two days of each other in late September 2026, and they pointed in opposite directions. On September 25, the London-based AI cloud company announced a $3.36 billion pre-IPO convertible financing led by the hedge fund Third Point. The day before, the Guardian reported that the company's planned AI supercomputer campus in Loughton, Essex, could lack sufficient grid power until the early to mid 2030s.
The $3.36 billion is not all in hand. Nscale's release splits it into an initial $2.36 billion tranche at closing and a further $1 billion commitment from NVIDIA, with funding expected in mid-November 2026. The 2030s date is reported and unconfirmed. The Guardian says UK Power Networks (UKPN), the regional distribution operator that will connect the site, has reportedly told Nscale as much, and credits The Morning Intelligence, a UK AI newsletter, with the first report. UKPN told the paper it could not comment on an individual project.
Read together, the two stories pull apart three things that tend to get reported as a single milestone: capital raised, capacity contracted with a customer, and compute that is energized and earning revenue. Each runs on its own clock, and at Loughton, on the reporting so far, the grid connection is the one furthest out.
The notes are convertible loan notes, a form of debt that turns into equity on a trigger event. Here the trigger is the listing: Nscale says the notes convert automatically into ordinary shares on completion of its initial public offering, with NVIDIA's portion converting into non-voting shares. Funds managed by Apollo, Citadel, Hudson Bay Capital and the Abu Dhabi Investment Council are among the named participants, alongside NVIDIA and 8090 Industries. Several of these investors recur across AI infrastructure finance. Apollo, for one, also appears in the investor group SCN traced in its look at the private capital behind OpenAI's and Anthropic's deployment companies.
The release does not give an interest rate, a maturity date, or a conversion price. Nscale's Form S-1, filed publicly on September 18, fills in part of that. It describes a subscription agreement signed on September 15 for at least $3.1 billion: $2.1 billion of unsecured convertible loan notes and a further $1.0 billion from NVIDIA. The notes mature on June 15, 2028, unless converted or repurchased earlier. NVIDIA's portion is due to close on or around November 16, 2026, as additional notes if that falls before the registration statement takes effect and as non-voting shares if it falls after.
The totals in the September 25 release are $260 million higher than the filing minimum. Neither document gives an interest rate or a conversion price, and the S-1's offering price range is still blank. The S-1 says Nscale intends to apply to list on the NYSE under the symbol NSCL; TechCrunch reports, citing the Financial Times and Bloomberg, a valuation of about $35 billion and a raise of about $3 billion.
On use of proceeds, the release says the money will accelerate Nscale's vertically integrated platform, "from behind-the-meter power plants to liquid-cooled AI data centers and large-scale GPU clusters," and names no site or customer.
The S-1 is useful here because its glossary separates the milestones explicitly. "Active capacity" is IT megawatt capacity that is "online and revenue generating." "Contracted capacity" is capacity at facilities under development pursuant to signed customer contracts. A third category, "potential power capacity," covers megawatts expected only after behind-the-meter generation is built or grid capacity applications are approved. The filing's term "operating data center sites" includes sites still under development under signed contracts, so in the S-1's vocabulary, "operating" does not mean energized.
The gap between the categories is large. As of August 31, 2026, the S-1 reports about $2.6 billion of active total contract value (TCV) and $103.4 billion of active and contracted TCV under long-term take-or-pay contracts, supporting roughly 461,000 GPUs active or contracted. The filing says contract terms commence upon successful delivery of GPU compute clusters. Revenue follows energized, delivered hardware: Nscale reported $33.0 million of revenue for 2025 and $140.6 million for the first half of 2026, with a first-half net loss of $1.02 billion and $1.5 billion in cash and equivalents at June 30.
The S-1 does not break that total down by customer. The two largest customer agreements it puts a value on are Anthropic's, signed August 25, 2026, at up to about $44.6 billion, and Microsoft's at up to about $43.8 billion. The Microsoft figure comes from statements of work signed between September 2025 and April 2026 and runs through December 2033, excluding optional extensions and "subject to the satisfaction of delivery and availability of service requirements." The filing gives no per-site breakdown, so Loughton's share of the Microsoft figure is not public. It does say that certain Nscale customer contracts give the customer a right to terminate for delays, with varying notice periods. It does not say whether any Microsoft statement of work covering Loughton falls under that.
SCN has argued before that contracted megawatts are the buildout's scarcest asset. A customer commitment for Loughton's compute was announced in September 2025, but the date the grid can deliver enough power to run it remains unsettled.
Loughton has carried a changing delivery date since it was announced. Each row below is sourced; the final one is reported and unconfirmed by the grid operator.
Date | What was said | Source |
|---|---|---|
January 13, 2025 | Site purchase announced; "equipped to support 50MW" of AI and HPC capacity, scalable to 90 MW; "scheduled to be live in Q4 2026"; up to 45,000 NVIDIA GB200 GPUs | |
September 16, 2025 | Nscale and Microsoft commitment on the Loughton campus; 23,040 NVIDIA GB300 GPUs delivered in Q1 2027 for Microsoft Azure services; billed as the UK's largest AI supercomputer | |
October 15, 2025 | Expanded Microsoft deal of about 200,000 GB300 GPUs across Europe and the US; Loughton restated at about 23,000 GB300s from Q1 2027 | |
March 2026 | Guardian finds the site still an operating scaffolding yard; Microsoft says it agreed to become Nscale's customer once the data center is built; Nscale says it is investing in offsite power infrastructure and, in a March 27 footnote, that it aims to deliver in 2027 | |
July 2026 | The Telegraph reports Nscale was told power would not be available in time to open in 2027 (via Capacity) | |
September 24, 2026 | Guardian reports UKPN told Nscale sufficient power may not be available until the early to mid 2030s; site cleared; Nscale "committed to the project" |
Nscale's confidential draft registration statements, now public on EDGAR, show earlier planning detail. The February 17, 2026 draft describes an approximately 50 MW site in Loughton where Nscale expected to begin construction in the second quarter of 2026, and its financial statement notes record $4.3 million of commitments, as of December 31, 2024, for substation-related infrastructure at the site, payable quarterly through August 2026. The August 12 amendment still names Loughton.
The September 18 public S-1 does not mention Loughton or Essex by name; it replaces the named-site list with a list of countries. Other sites, including Glomfjord, Kvandal, Ward County and the Monarch Compute Campus, are still named elsewhere in the filing. Loughton is not. The facilities table does include one owned UK site, rated at 50 IT megawatts and classed as contracted. SCN's reading is that this row is very likely Loughton, since it is the only owned 50 MW UK site Nscale has disclosed, but the filing does not say so. The table's "Tier 1" label is a market classification (a primary location) and has nothing to do with the Uptime Institute's facility tiers. Why the site name dropped out of the public filing is not explained in the document.
No grid operator has confirmed the early-to-mid-2030s date.
UKPN declined to discuss the project, but a spokesperson gave the Guardian a general description of the constraint: "many datacentres, whilst they will connect to our distribution network, are awaiting works on the wider national electricity transmission network before they can begin operation." That points at the high-voltage transmission system run by National Grid and planned by the National Energy System Operator (NESO), one level above the local distribution network UKPN operates. Whether Loughton's constraint sits at transmission level, distribution level or both is not public. National Grid told the Guardian it was working with NESO and distribution operators to accelerate connections where possible, and a government spokesperson said NESO and Ofgem were working to get the right projects connected under a reformed application process.
The queue that Loughton sits in is crowded. Ofgem's July 29 consultation on data center connection reforms counts approximately 315 data center projects seeking connection in Great Britain, around 73 GW of demand against Great Britain's 2025 peak demand of 45 GW; the Guardian reported the figures the same day. For projects above 40 MW, Ofgem has proposed a commitment fee of 2.5% to 7.5% of average data center capital expenditure to secure a connection date, returned on energization, along with hard milestones that could remove slow projects from the queue. Responses closed in mid-September, and a decision is pending. Ofgem's June 2026 demand connections update lists the time needed to build network or generation capacity as a key source of delay, alongside nonviable projects holding queue positions. Whether Loughton holds a connection offer under the reformed process, and at what date, has not been published.
The pattern is familiar from elsewhere in Europe. Denmark's transmission operator Energinet temporarily paused new transmission-level connection agreements in March 2026, with roughly 60 GW of queued demand against a national peak near 7 GW. SCN has also tracked how NVIDIA's order backlog runs into the same grid capacity limits. Loughton is small beside the targets now being announced; Alibaba says it will operate more than 20 GW worldwide by 2032. At 50 MW, scalable to 90 MW, it is above the proposal's 40 MW size threshold, though for a distribution-connected site the fee would apply only if the project is subject to a transmission assessment.
The Guardian reports that Nscale is investigating whether it can generate power on site and speed up the connection process. In July, Capacity, citing the Telegraph, reported that Nscale was in discussions with Bloom Energy, which makes solid oxide fuel cells. No public document shows the technology, size, permitting, fuel supply or financing of any on-site plant at Loughton. It is also unclear whether the planning permission Epping Forest District Council granted in June 2026, as reported by Capacity citing the Telegraph, covers on-site generation.
Nscale would not be alone in exploring it. Ofgem's June update says it has seen a rise in applications to connect to the gas network, principally from data centers aiming to operate before their electricity connection arrives, and counts around 117 active cases, from inquiries through to formal applications, mostly on the distribution network. Going off-grid brings its own queue. SCN's reporting on a 2031 gas-turbine delivery slot found that turbines, air permits, gas supply and construction capacity each carry their own lead times, and that, for projects seeking service within 18 to 36 months, Enverus points to modular options such as fuel cells and reciprocating engines. In the United States, xAI's decision to run gas turbines at its Southaven, Mississippi, site ahead of air permits showed how on-site generation can turn into a permitting dispute of its own.
The UK government cited Loughton when it set out its AI strategy in 2025, describing it, per the Guardian, as the "largest UK sovereign AI datacentre." Nscale's own January 2025 announcement said its UK sites would provide sovereign, secure and private AI computing for UK industry and research. The contracted customer for the campus, as announced, is Microsoft, to run Azure services across the UK.
The rest of Nscale's UK story has shifted too. The S-1 states that OpenAI withdrew from the Stargate Norway and Stargate UK partnerships in April 2026, and that Microsoft then expanded its agreement to take the extra capacity at Stargate Norway. The filing does not say who, if anyone, has taken OpenAI's place in the UK. Stargate UK had been framed in September 2025 as a platform with a particular focus on sovereign workloads, with OpenAI exploring offtake of up to 8,000 GPUs in early 2026 and potentially 31,000 over time.
Nscale's 2025 revenue leaned heavily on one customer. The S-1 says Nscale's largest customer accounted for 73% of 2025 revenue, without naming it, and that it expects that customer to be less than 20% of 2026 revenue. In the first half of 2026, the largest customer accounted for 52% of revenue; the filing does not say whether it is the same one. The February 2026 draft registration statement names ByteDance as the largest customer for 2025, but leaves the percentage blank. Later drafts and the public S-1 give the percentage and drop the name. Taken together, the filings support the conclusion that ByteDance supplied 73% of Nscale's 2025 revenue.
Neither Nscale nor Microsoft has published what the campus will host beyond Azure services, so how its output maps onto the government's sovereign label is an open question.
NVIDIA's $1 billion tranche is due to close on or around November 16, according to the S-1, and an amended S-1 would include the notes' interest rate and conversion price, as well as any update on UK capacity. Ofgem's decision on the data-center commitment fee will show how the regulator intends to sort the 73 GW queue. For Loughton itself, the questions are concrete: whether UKPN or NESO confirms a connection date, whether any on-site plant is designed, permitted and financed, and whether Microsoft's Loughton commitment and the 23,040-GPU, Q1 2027 delivery plan still stand as announced. Nscale's S-1 lists "grid connection delays and capacity constraints" among its construction risks, in generic terms and without naming a site.
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