Third Point to lead $1.5bn pre-IPO notes for Nscale

Third Point will lead a $1.5 billion pre-IPO convertible note financing for AI infrastructure company Nscale as it prepares for a possible public listing, according to people familiar with the talks.

The fundraising package being pitched to investors could total about $3.5 billion, made up of the $1.5 billion in convertible notes and a potential separate $2 billion investment from Nvidia, those people said.

The convertible notes are being marketed at a double-digit discount to whatever price Nscale sets in an eventual IPO. The discount would increase as the company’s valuation rises up to $30 billion, after which the conversion price would be fixed.

Third Point, the New York hedge fund founded by Dan Loeb, is expected to lead the convertible note tranche, with Goldman Sachs advising on the fundraising. Discussions over the final size of the financing and the full roster of investors are ongoing. Representatives for Third Point and Nvidia did not respond to requests for comment. Nscale and Goldman Sachs declined to comment.

Nscale was founded in 2024 and operates data centres, provides GPU hardware and runs a proprietary software platform to deliver large-scale compute for artificial intelligence applications. The company raised $2 billion in a Series C round in March that valued it at $14.6 billion.

Nscale agreed a six-year commercial contract with Anthropic to rent AI computing capacity at its West Virginia data centre campus, with payments over the contract term estimated at about $45 billion.

Convertible notes are debt instruments that can convert into equity at a later event such as an IPO. In this financing the notes would convert into IPO shares at a discounted price, giving early investors a built-in return if the listing price exceeds the conversion price. The planned adjustment of the discount up to a $30 billion valuation would limit how conversion works beyond that valuation.

Goldman Sachs is helping to market the securities and advise on the deal structure as Nscale positions itself for a potential stock market debut. The company has not set a public listing date and terms and investor participation remain under negotiation.