By PYMNTS | October 18, 2026
Artificial intelligence cloud company Nscale is reportedly facing pushback from investors to its IPO valuation target.
Some backers are balking at the company’s initial public offering (IPO) goal of around $30 billion, instead suggesting a range of $16 billion to $19 billion, Bloomberg News reported Sunday (Oct. 18).
The report, citing sources familiar with the matter, said the IPO is facing challenges including the valuation disconnect and a cancelled data center deal with Microsoft. Investors are also taking into accounts the collapse of Australian data center company Firmus’ IPO plans, sources said.
Nscale is also working through comments from the U.S. Securities and Exchange Commission (SEC) on its filing, with discussions still happening ongoing and no decisions having been made, the report said.
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Microsoft said Sunday that it was pulling out of the data center agreement with Nscale, citing delays related to power constraints, the report added.
Sentiment around AI infrastructure companies such as chipmakers and cloud computing firms has soured as borrowing costs have increased and uncertainty over the technology’s long-term payoff has grown, Bloomberg said.
As covered here in July, the five companies spending the most on AI data centers in the United States — Alphabet, Amazon, Meta, Microsoft and Oracle — doubled their debt load over the last five years to support their efforts. In all, these tech giants added roughly $350 billion to their debt obligations.
The Bloomberg report notes that a gap in expectations between a company aiming to go public and potential investors can lead that business to slow the process.
Nscale filed to go public Sept. 18 but has yet to begin formal marketing, even though the required 15 day waiting period has ended, the report said.
Nscale last month signed what it described as a major deal with humanoid robotics developer Figure. The multi-year agreement will see Nscale deliver computing resources for Figure and commit at least $3.5 billion — and up to $6 billion — to fuel the development of Figure’s AI models and robots.
“We’re excited to partner with Figure as physical intelligence becomes AI’s next frontier,” Josh Payne, Nscale’s founder and CEO, said in a news release. “We’ve seen incredible growth with inference and agentic AI and Figure is pushing the boundaries of AI even further. We’re proud to be enabling the future of AI robotics together.”