Home / Business and Economy / Nscale IPO: ByteDance Deal Kept Hidden
Nscale IPO: ByteDance Deal Kept Hidden
23 Sep
Summary
- Nscale hid its major ByteDance relationship in IPO filings.
- ByteDance accounted for 73% of Nscale's revenue last year.
- The deal exploited a loophole in US trade restrictions.
Nscale, an AI cloud provider with backing from Nvidia, omitted a crucial relationship with ByteDance from its investor pitch. ByteDance, a major Chinese tech company, accounted for approximately 73 percent of Nscale's $33 million revenue in the past year. This significant connection was only obliquely referenced in a filing separate from Nscale's main IPO document.
ByteDance utilized Nscale's cloud services in Norway to access advanced Nvidia AI chips, navigating around existing US trade restrictions. This arrangement, while legal, introduces regulatory and reputational risks for Nscale amidst ongoing US-China technological competition. The company's IPO filing did not name ByteDance directly, instead mentioning a subsidiary, Spring (SG) Pte Ltd, in a loan agreement.
Nscale's relationship with ByteDance commenced shortly after it separated from its bitcoin mining parent company. A contract signed in May 2025 detailed Spring renting 2,304 Nvidia B200 chips from Nscale's Norwegian data center. This deal was instrumental in securing a $105 million loan for Nscale, facilitating the purchase of these chips.
Despite the lack of direct mention, Nscale's IPO filing did warn investors about potential risks associated with tighter US export controls and the perception of dealings with Chinese customers. The company's future revenue is expected to be less reliant on this single large customer as major contracts with Microsoft and Anthropic expand.
