Nscale's flagship Norway data center is running 6 months late ahead of its IPO

Nscale is building its Glomfjord, Norway, data center six months behind schedule, according to Bloomberg. The site is billed as a flagship for the British AI infrastructure company, which hopes to raise as much as $3 billion through an IPO this month, according to Bloomberg.

Of the 30 megawatts planned at the site, 6.4 megawatts are running, according to Bloomberg. Coolant leaks, regulatory hurdles at the local level, slow construction and a blaze set the project back, according to Bloomberg, which relied on public records and people close to the project.

Nscale is building the Glomfjord facility for ByteDance, the owner of TikTok. Delays there left Nscale on the hook for penalties totaling millions of dollars, according to Bloomberg, which cited people familiar with the matter. Rather than collect the fines, the customers were offered more favorable conditions in new contracts, according to Bloomberg's sources.

The fire began in December when a transformer burned, according to Bloomberg, citing public records. A Norwegian safety agency identified 10 safety violations, and Nscale's fixes led regulators to close the inspection case in September, according to Bloomberg.

Nscale filed its registration statement on Sept. 18 to list on the New York Stock Exchange under the symbol "NSCL." The filing leaves the share count and price range blank.

In the filing, Nscale said its customer contracts include performance milestones, service-level requirements and delay penalties. It said failures to meet them, whether from supply chain disruptions or construction delays, could trigger substantial penalty payments or customer remedies.

The company said Anthropic may terminate a tranche of its agreement without liability if Nscale fails to deliver it within a specified period after the expected delivery date. Nscale said it had not obtained binding commitments for any of the financing needed to perform under the Anthropic agreements, which provide for payments of up to about $44.6 billion.

Nscale had filed for an initial public offering disclosing that Microsoft $MSFT and Anthropic together account for 85% of its $103 billion in total contract value. Only $2.6 billion of that value was active as of the end of August, the company said in the filing.

Nscale declined to comment to Bloomberg, citing the pre-IPO quiet period.