Nscale secures a $900 million revolving credit facility to support its data center expansion.

      Nscale has secured a $900 million revolving credit facility, a source of funds it intends to utilize to accelerate its data center expansion across the US, Europe, and Asia-Pacific, as reported by the company on Tuesday. The London-based firm, which raised $2 billion in a Series C round at a $14.6 billion valuation in March, is accumulating debt nearly as rapidly as it has gathered equity.

      This facility has been syndicated among a dozen banks, which is significant in itself. Participating banks include J.P. Morgan, Goldman Sachs, Morgan Stanley, MUFG, RBC Capital Markets, Bank of America, Crédit Agricole CIB, Deutsche Bank, Mizuho, SMBC, TD Securities, and KeyBank—often, such syndicates are formed for well-established borrowers rather than a company founded just two years ago.

      A revolving credit facility operates similarly to a corporate overdraft, allowing a company to borrow, repay, and borrow again as needed. For Nscale, this flexibility holds more value than a one-time lump sum, particularly given that the $790 million it secured for its Narvik site in Norway demonstrated the project-specific nature of its previous financing.

      Additionally, a revolver offers an advantage over a new equity round by providing funding without diluting existing shareholders, which is crucial for a company that has already sold significant portions of its equity across three rounds in less than 18 months.

      The timing challenge is particularly pressing for those constructing AI data centers. Financial commitments to Nvidia chips, energy contracts, and construction occur long before the revenue from leasing that capacity materializes, and a revolver is meant to bridge that gap.

      Nscale did not reveal the pricing, duration, or maturity date of the facility, nor whether the borrowing is secured against its chips or property. These details typically influence the actual cost of liquidity, and their absence leaves the true expense of the deal uncertain.

      "The closing of this revolving credit facility with leading global investment banks demonstrates significant institutional confidence in our platform, capital structure, and team," stated Josh Payne, Nscale’s CEO and founder. He emphasized that the facility enhances the company’s ability to build "quickly and at scale" for the technology firms developing and deploying large AI models.

      This credit line adds to a remarkable series of fundraising efforts. Nscale completed a $1.1 billion Series B and subsequently a $2 billion Series C, both touted as the largest of their kind in European history, alongside a $1.4 billion delayed-draw term loan secured by its GPUs.

      This financing spree has transformed the company, barely two years old, into one of the most well-capitalized private enterprises in the AI sector. Nscale originated as a crypto-mining operation before shifting its focus to AI computing, with its Series C attracting investors like Nvidia, Dell, Lenovo, and trading firms Citadel and Jane Street, many of whom are now supporting Europe’s data center growth.

      The allocation of funds is clearer now. Nscale has signed a 1.35 GW letter of intent with Microsoft for a campus in West Virginia and allocated €695 million for a site in Portugal that will supply Nvidia chips to Microsoft, which involves hundreds of thousands of GPUs and necessitates the kind of flexible financing offered by a revolver.

      Founded in 2021 by Payne, an Australian entrepreneur, Nscale positions itself as a full-stack AI cloud, offering a combined solution of software, computing power, and energy within a vertically integrated framework. It operates and colocates data centers across Europe, North America, and Asia, many of which are located near cost-effective Nordic hydropower sources.

      The company did not disclose how much of the $900 million it has accessed so far or which projects will receive funding first. Based on the past year’s activity, the more challenging question may not be where the money will be allocated, but rather how quickly Nscale can utilize it.