Nscale raises $3.36 billion led by Third Point

Nscale was spun out of the Australian cryptocurrency mining company Arkon Energy two years ago, and it has since amassed over $103 billion worth of contracts, according to its IPO filing. That contract book is the backdrop for the financing announced Friday: a convertible note structured to give the company $2.36 billion up front, with the remaining $1 billion from existing investor Nvidia arriving in mid-November.

The round's structure ties the money to a public listing. Nscale filed its IPO paperwork last week, and the notes will convert into equity shares only once the IPO is completed. The Financial Times reported the company is expected to be valued at $35 billion on the NYSE, while Bloomberg reported it is seeking to raise $3 billion in the offering.

The scale of the buildout Nscale is funding — large data center campuses in Norway and West Virginia — suggests the financing is sized to a construction pipeline rather than to near-term revenue, and the presence of both a leading hedge fund and Nvidia among the backers may be read as a vote of confidence in that pipeline. Whether the deal's economics hold will hinge on the listing landing at the expected valuation, since conversion into equity depends on the IPO completing.