Nscale reported a third-quarter net loss of $1.69 billion on revenues of $307.5 million, marking a year-over-year revenue increase of 1,344%. This loss is an increase from $1.02 billion in the previous quarter, when revenue was $140.6 million, up 1,252%. The company, which filed for an IPO in September, has not disclosed how much it aims to raise.
Compounding its challenges, Microsoft has withdrawn from a planned data center partnership with Nscale in England, citing issues related to electricity access. Additionally, Microsoft chose not to renew a contract with Nscale in Texas, despite the company's expectation that Microsoft would remain a significant customer.
The neocloud market is currently volatile, particularly following the resignation of Nvidia's CEO Jensen Huang amid personal controversies, which has affected investor sentiment. Rival CoreWeave's stock saw fluctuations, rising nearly 25% on strong results before pulling back 7% after Huang's departure.
Meanwhile, Nscale has secured additional business with Anthropic, which is also preparing for an IPO, indicating some potential for growth despite the current setbacks