Nvidia-Backed Nscale’s IPO Faces Valuation Pushback as AI Infrastructure Stocks Slide

Nscale, the London-based AI data center developer backed by Nvidia NVDA, is facing investor pushback over the roughly $30 billion valuation it’s seeking in its U.S. IPO, Bloomberg reported, citing people familiar with the matter. Some investors have argued that a valuation of $16 billion to $19 billion would be more likely to attract buyers, pointing in part to the collapse of Australian AI data center company Firmus’ IPO plan.

The valuation gap comes as Microsoft MSFT, both an investor and a client, has pulled out of a UK data center deal with Nscale after power constraints delayed the site. Construction at Nscale’s flagship facility in Norway is running six months behind schedule.

Nscale filed publicly for a U.S. listing on September 18. The company is still working through SEC comments on its filing and plans to begin marketing once those are resolved, the people said. Last month, it raised $3.36 billion in a pre-IPO round led by Third Point, with Nvidia, Apollo Global Management APO and Citadel among the investors.

The neocloud sector has been under fire. CoreWeave CRWV lost a quarter of its market value last week amid rising concerns about its debt, and Nebius Group NBIS shares have fallen 32% over the past two weeks.