- Nscale has raised $155 million in Series A funding for its hyperscaler platform.
- The startup offers everything from data center access to GPU infrastructure.
- BI got an exclusive look at the pitch memo the startup used to secure the new funds.
Nscale, a London-based startup that provides businesses with access to data centers and AI chip clusters, has raised $155 million in new funding.
The startup, released from stealth in May 2024, presents itself as a fully integrated AI infrastructure platform.
As a hyperscaler, Nscale provides the “full stack” of technologies businesses need to train and run AI applications such as large language models. This includes data centers, software and graphics processing units, Nscale founder and CEO Joshua Payne told Business Insider in an interview.
The startup differentiates itself from AI cloud providers, such as Lambda Labs and Basic weavewhich only offer specific components, such as GPUs, in the AI infrastructure layer. By providing everything from its own data centers to virtualized GPU nodes, Payne said the company could benefit from better unit profitability than its competitors.
“The problem for the industry is the chicken and the egg. Take an LLM customer: they might want 10,000 GPUs, but they don’t have the expertise for that,” he said. declared to BI. “Many of our competitors do not have their own data centers, so they must obtain a license. In our case, we have all of this in-house. Because we are able to own all of these segments of the value chain, we’re faster and cheaper.”
Payne said Nscale pivoted to focus on AI infrastructure across the stack following the public release of ChatGPT-3. “So our thesis was: If this is indeed the fourth industrial revolution as people claim, how do we build a resilient AI cloud that would survive commodity cycles? Payne said. that the best way to achieve this was to integrate vertically. by building both data centers, GPUs and software.
Since emerging from stealth, it has rapidly increased its capacity at new data centers in Europe and the United States, from 300 megawatts to 1.3 gigawatts.
The startup makes money by building data centers, purchasing GPUs, and deploying AI cloud services, which it then rents out on an hourly basis. Customers can sign contracts for a specific period to use the services.
Sandton Capital Partners led the $155 million funding round, which also included Kestrel, Bluesky Asset Management and Florence Capital. The startup has already raised more than $30 million in pre-seed and seed funding, with the scale of these early rounds reflecting increased investor appetite to back startups operating in the infrastructure layer of AI.
With this new funding, Nscale plans to invest in large GPU clusters and also to double down on software development for its public cloud platform, which launches in January 2025.
BI got an exclusive look at the 9-slide memo the startup used to secure new funding.