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(Bloomberg) — Nscale, a startup that is less than a year old, is already trying to raise about $2.7 billion to build artificial intelligence infrastructure on the back of a pending partnership with ByteDance Ltd., the Chinese owner of TikTok, according to an offering document seen by Bloomberg.
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The money, if Nscale follows through with the proposal, would allow the London-based company to build out data centers around the globe — filled with Nvidia Corp. chips — that would be rented out by companies such as ByteDance, in order to train and operate their AI models.
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The biggest chunk of the financing would be a $1.8 billion private credit deal led by Goldman Sachs bankers, according to the offering document that was prepared for investors. Nscale has also been trying to raise another $900 million in preferred equity and convertible shares, the document shows.
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The conversations began before financial markets were rocked by President Donald Trump’s tariff rollout in early April, and plans for the financing may change or be delayed, said people familiar with the matter, who asked not to be identified because the discussions are private.
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In an emailed statement, a spokesperson for Nscale said: “We recognise that increasing demand for AI and keen interest in our rapidly evolving industry is generating a lot of attention for Nscale, but we do not comment on speculation.”
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A Goldman Sachs spokesperson declined to comment.
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The speed with which Nscale is pursuing the proposed deal — just 11 months after its founding — underscores how the AI boom has paved the way for relatively untested startups to seek enormous sums of money to expand. Headwinds to fundraising deals are mounting, though, as investors grow increasingly concerned about the sustainability of the AI spending frenzy and financial markets continue to whipsaw in the wake of Trump’s tariff plan.
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Nscale has been marketing its debt deal by pointing to a potential $2 billion contract that it said it is finalizing with ByteDance, according to the document. Nscale is already working on a smaller project with ByteDance that began operating earlier this year, the document indicates.
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A spokesperson for ByteDance said that the two companies have had some discussions about expanding their business together but that talk of a $2 billion contract “significantly overstates the scale of any possible cooperation.”
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