Abu Dhabi fund joins $3.4bn raise for UK's Nscale

Summary

• Abu Dhabi Investment Council backed Nscale's $3.4 billion convertible note round, AGBI reported.
• Nscale runs AI data centres from London and holds over $103 billion in contracted value.
• The deal deepens Abu Dhabi's push into the physical infrastructure powering artificial intelligence.

The latest

Nscale, a London-based AI data centre operator, has raised $3.4 billion through convertible loan notes, with Abu Dhabi Investment Council among the backers, AGBI reported. The round is led by US hedge fund Third Point, and the company said funding is expected in mid-November. Nscale's chief executive Josh Payne said the capital positions the firm to accelerate data centre build-outs globally.

Details

• The structure: Nscale said it will receive $2.4 billion at closing, alongside a separate $1 billion commitment from Nvidia. The loan notes automatically convert into ordinary shares once Nscale completes an initial public offering, while Nvidia's notes convert into non-voting shares, keeping the chipmaker out of shareholder decisions.
• The Abu Dhabi investor: Adic is wholly owned by Mubadala Investment Company and was established in 2007 to invest across private equity, capital solutions, real assets, public markets and secondary sectors. Neither Adic nor Nscale disclosed the size of the council's contribution to the round.
• The scale: Nscale says it holds more than $103 billion in total contracted value, a figure that dwarfs the current raise and points to long-dated commitments from customers for AI compute capacity. The company did not break down which clients account for that pipeline.
• The timing: AGBI reported the funding is expected in mid-November, with the conversion to equity tied to an IPO whose date has not been announced. That leaves the listing itself as the trigger that turns creditors into shareholders.
• In Payne's words: Nscale founder and chief executive Josh Payne said the company continues "scaling our full-stack AI infrastructure to meet unprecedented global demand," adding that the new backers strengthen its position to expand data centre construction internationally.
• Mubadala's strategy: Group chief executive Khaldoon Al Mubarak said in January that the $330 billion wealth fund was targeting opportunities in AI and robotics. Mubadala had already backed Crusoe, a San Francisco-based AI infrastructure provider, in a $600 million round in December 2024.
• The wider bet: According to AGBI, Mubadala and other state-backed investors are directing capital into data centres, cloud computing and AI companies, an allocation shift toward the physical layer of the technology rather than software applications built on top of it.
• The alliance: The UAE has joined Pax Silica, a US-led coalition aiming to secure cross-border infrastructure and supply chains for the AI era. Mubadala, ADQ, G42 and MGX are engaging with US partners ranging from Nvidia to OpenAI, AGBI reported.

Background

Abu Dhabi has spent the past two years converting oil revenue into stakes across the AI supply chain, from chips to data centres, through vehicles including Mubadala, ADQ, G42 and MGX. Nscale is the latest target outside the United States.

Between the lines

Nvidia's decision to take non-voting shares while committing $1 billion suggests a supplier securing demand for its chips rather than seeking control. For Abu Dhabi, the undisclosed Adic ticket buys exposure to a company whose $103 billion contracted pipeline is the real asset, with the IPO conversion clause offering a defined exit path.

What's next

Watch for the mid-November funding close, any announcement of an IPO date that would trigger the note conversion, and disclosure of Adic's stake size once Nscale files listing documents.

Source: AGBI (Arabian Gulf Business Insight)