Nscale, an emerging cloud services provider with backing from NVIDIA and clients including OpenAI and Microsoft, is in negotiations to acquire a large AI data center site in the United States, according to sources familiar with the matter and financing documents reviewed.

The site is located in West Virginia. If the acquisition is completed, the UK-based cloud services startup would instantly become a significant player in US AI infrastructure. Nscale has informed investors that the Mason County, West Virginia site is highly valuable because it has already received local regulatory approvals and has secured power infrastructure for the project's initial phase.

However, developing the first phase of AI data center facilities on the site will still require tens of billions of dollars in funding.

Under the proposed transaction, Nscale would acquire American Intelligence & Power (AIP), the company that owns the site along with the relevant permits and power agreements. Terms of the deal have not been disclosed. Financing materials indicate that Amazon, Meta Platforms, and Fluidstack, another emerging cloud provider with ties to Google and Anthropic, have also expressed interest in the site.

Nscale, which had modest revenue last year, told investors in its documents that acquiring this data center campus could triple its near-term revenue projections. Negotiations between Nscale and AIP are ongoing, and a final agreement may not be reached.

On Monday, Nscale announced the completion of a $2 billion funding round led by Norwegian investment firm Aker ASA and 8090 Industries, the latter being the firm that co-founded AIP specifically to develop the West Virginia site. Prior to this funding round, Nscale was valued at $14.6 billion. The company also announced that Meta's former COO Sheryl Sandberg and former UK Deputy Prime Minister and Meta's former President of Global Affairs, Nick Clegg, are joining its board of directors.

The potential acquisition of the site is expected to enhance Nscale's prospects for an initial public offering (IPO).

Last month, media reports indicated that Nscale is preparing for a public listing alongside other NVIDIA-backed AI cloud providers like Lambda and Crusoe. Nscale investor 8090 Industries has informed potential investors that the company could go public before September.

**Company Background** Nscale is one of several "neocloud" service providers that have emerged from cryptocurrency mining operations. It was spun off from Australian crypto miner Arkon Energy in 2024.

**NVIDIA Stake** Documents show that prior to the latest funding round, NVIDIA was Nscale's largest preferred shareholder, holding a stake of over 10% last year. In recent years, NVIDIA has supplied AI chips to several emerging cloud providers, including CoreWeave and Lambda, helping them gain a foothold in a competitive market. These smaller cloud providers help NVIDIA diversify its customer base beyond a handful of major cloud vendors like Microsoft and Google, which are the primary sources of its GPU revenue.

Compared to traditional cloud providers, these smaller firms are often more willing to purchase a wider range of NVIDIA's hardware products and are less likely to develop their own AI chips, which could pose a competitive threat to NVIDIA.

Nscale's strategic shift from leasing cloud servers to owning its own data centers and power resources mirrors the path taken by other cloud providers like Google and CoreWeave, which have also chosen to acquire such assets rather than relying solely on external suppliers. In the long term, this approach can help cloud providers save costs. Some providers believe that having greater control over facilities can minimize costly delays in building complex AI server networks.

In December of last year, Nscale acquired Future-tech, a European data center engineering consultancy with 60 employees, signaling its intent to expand into data center development.

Spokespeople for Nscale, AIP, and Meta declined to comment.

**Revenue Growth Forecast** Nscale anticipates significant revenue growth in the coming years, projecting an increase from approximately $1.5 billion in 2026 to around $9 billion in 2027. Documents indicate that if the transaction with AIP is completed, its 2027 revenue projection would be revised upward to $30 billion, surpassing analyst estimates for CoreWeave's revenue that year, according to materials prepared by Goldman Sachs for a CoreWeave financing round.

It is not yet clear which customers Nscale plans to partner with to achieve these revenue targets. Investors have grown skeptical of ambitious data center revenue projections put forward by other cloud providers, such as Oracle.

Similar to Oracle, Nscale is one of six cloud providers partnering with OpenAI and has also signed a significant server leasing agreement with Microsoft. In its investor materials, Nscale stated it is in talks with ByteDance regarding a multi-billion dollar computing power partnership and may lease servers to NVIDIA, which is also a key customer for other cloud providers in which Nscale has invested.

**Monarch Compute Project** AIP was established earlier this year through a joint venture between 8090 Industries and Houston-based energy company Fidelis New Energy to develop the West Virginia site. Prior to co-founding AIP, Fidelis New Energy had been developing the AI data center campus in West Virginia for several years.

AIP's flagship project in Point Pleasant, West Virginia, named the "Monarch Compute campus," plans to achieve 2 gigawatts of computing capacity by 2027, with an expansion to at least 8 gigawatts by 2030. Achieving 2 gigawatts by 2027 would make it one of the largest data center projects in the United States; for comparison, OpenAI's Stargate data center in Abilene, Texas, is planned to have a capacity of 1.2 gigawatts upon completion.

The cost of building 1 gigawatt of NVIDIA server capacity exceeds $50 billion, meaning an 8-gigawatt facility would require hundreds of billions of dollars in funding. Nscale may need to secure investment-grade tenants like Microsoft or Google, or obtain financial guarantees from such companies, before it can raise debt to begin facility construction.

**"Unregulated Utility" Model** AIP's website promotes the 2,000-acre West Virginia site as a microgrid that will have its own independent power source rather than connecting to the public grid, operating in a "behind-the-meter" model. This approach has long been seen as a way for data centers to secure power quickly. Last week, US President Donald Trump endorsed this model, urging technology companies like Microsoft, Amazon, OpenAI, and xAI to build their own AI power facilities to avoid surging electricity prices.

Nscale's materials on the potential transaction state that the initial 2-gigawatt phase of development for the West Virginia site does not require additional approvals from local utility companies, state government, or energy regulators. The materials include a photograph of Fidelis executives with West Virginia Governor Patrick Morrisey, taken when the governor signed new legislation designed to attract data center projects to the state near the Monarch facility site.

Nscale's financing materials describe the West Virginia site as "the first unregulated power utility in the US built specifically for AI, capable of serving hyperscale cloud providers faster than the public grid."