What changed between Nscale’s confidential IPO draft and public S-1 filing

On September 18, 2026, Nscale Ltd filed its public registration statement on Form S-1, aiming to list on the NYSE with a valuation as high as $35 billion, according to FT. The UK-based Nscale, which describes itself as a “full-stack AI hyperscaler”, spun off of Australian bitcoin miner Arkon Energy in May 2024. Nscale’s operational model combines power and data center development, GPU infrastructure, and cloud software, supported by multiyear agreements with customers including Microsoft and Anthropic.

At the same time, the S-1 filing reported $103.4 billion in total contract value as of August 31, 2026, but only $2.6 billion related to contracts that had begun generating revenue. The remaining $100.8 billion related to contracted projects that were not yet active as of the end of August:

“As of August 31, 2026, we had approximately $2.6 billion of active and $103.4 billion of active and contracted TCV under long-term take-or-pay contracts with customers, compared to $0.5 billion of active and $38.0 billion of active and contracted TCV as of December 31, 2025. These contracts support the deployment of approximately 461,000 GPUs that were active or contracted as of that date.”

The extent to which Nscale’s proposed valuation depended on facilities and contracts that were not yet generating revenue became a recurring theme in media coverage. For instance, the Financial Times contrasted Nscale’s possible $35 billion valuation with approximately $140 million of first-half revenue, while Reuters Breakingviews noted that less than $3 billion of its $103 billion in total contract value was active and only about 5% of its contracted GPUs were operating.

The contrast between modest first-half of 2026 revenue and ambitious valuation echoes what Francine and I observed in our DRS-to-S1 analysis of SB Energy.

Reviewing SB Energy’s IPO dreams

In a follow-up piece, Francine compared Nscale with SB Energy, which is attempting to expand from renewable-energy development into AI data centers. She noted that both companies were seeking multibillion-dollar valuations despite limited current revenue and substantial losses, with much of their investment case dependent on contracted infrastructure that was not yet operating and would require significant additional financing. Nvidia also provided financial support to both companies, although through different combinations of investments, guarantees and other credit support.

Rather than repeating Francine’s review of whether Nscale is ready for the public markets, I want to supplement the analysis by examining how the disclosure evolved between the initial non-public Draft Registration Statement (DRS) filed on February 17, 2026, and the public S-1 filed on September 18, 2026. Before an IPO, a company can submit a draft registration statement confidentially to the SEC. SEC staff then review the draft and may ask the company to correct, clarify, or expand its disclosures by issuing comment letters. The comment letters are generally confidential during the review but are expected to be publicly released on EDGAR about 30 days after the IPO date.

Analyzing the evolution of the disclosure is not a substitute for reading the S-1 in its entirety. However, as I explained in my previous pieces (here and here), the SEC will likely focus its review on accounting areas that are material to investors but were unclear or incorrect in the original DRS. Thus, examining the changes may provide incremental information about initially understated risks, overstated business claims, or contentious accounting areas corrected only after SEC intervention.

The DRS-to-S1 methodology has its limitations. The company may also revise the filing for unrelated reasons, including new contracts, updated financial results, or decisions by management and counsel. We therefore cannot assume that every change between Nscale’s initial draft and its public S-1 resulted from an SEC comment. (For a more detailed discussion of DRS-to-S1 methodology, see our SpaceX piece.)

In this piece, I focused on material changes between the DRS and S-1 filings that resemble the SEC comment letters, including:

• KPIs and Operating Metrics, including expanded definitions and discussion of active and contracted capacity, and total contract value.

• Updated Risk Factors disclosure; and

• Revenue recognition practices, including certain ASC 606 and ASC 842 considerations.

KPI, Metric, and Methodology Clarifications

A central criticism of Nscale’s proposed valuation was that it depended heavily on data centers that had been contracted but had not yet been built, connected to power, or begun generating revenue. Nscale describes the scale of this business partly through power and IT capacity measured in megawatts: the more capacity a data center can support, the more GPUs it can operate and the more computing services it can potentially sell.

The capacity metrics therefore should help investors distinguish the scale of Nscale’s existing operations from the much larger business it expects to build. However, the initial DRS prospectus blurred this distinction by defining the “active power” measure to include both active contracted capacity and capacity still under development.