AI company Nscale investors urge company to lower $30 billion IPO valuation target

People familiar with the matter said that after a string of market setbacks for multiple AI companies, investors have pushed back against the valuation target Nscale Ltd. is seeking in its IPO. The data center developer, which is backed by Nvidia, had originally hoped for an IPO valuation of about $30 billion, the sources said. Some of the people familiar with the matter said that, considering factors such as the failed listing plan of Australian AI data center company Firmus, many investors have recently suggested that a valuation in the $16 billion to $19 billion range would be easier to get the market to subscribe to. The valuation disagreement has made Nscale's IPO plans even more difficult. The company said on Sunday that Microsoft, one of its largest customers, has withdrawn from a UK data center partnership project that had been repeatedly delayed by power supply constraints. As financing costs rise and uncertainty over the long-term returns of AI technology increases, market sentiment toward AI infrastructure companies such as chipmakers and cloud computing firms has weakened.