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Nvidia backs AI data center startup Nscale as it hits $14.6B valuation
- structuredPizza 7mo agoChat, why do we hear so little about banks no longer funding mega data centers? Noise or signal?
- maxdo 7mo agoI think it’s lagging indicator. There were signs of saturation in the end of 2025. From 2025 to March 2026 average developer ai spent gone from $20/mo to at least $200. In my company it’s $1000-1500/mo to anthropic only. In many cases this 20x+ increase over 3 mo. This is going in other industries too. Claude cowork is just an example and beginning of the trend. Show me any product that / company that charge you 20x and customers are happy , well its anthropic
- dgan 7mo agoI dont know what world you/I are living in. I do ask claude to enumerate/explain concepts i am not familiar with. I never approached the free tier limit (is there one?). At work, we have a webpage which ia basically a chat to different models, sometimes i use it Would I be paying 20€ to ask those questions? I dunno, i dont feel any particular need. Would I be paying 200€?! Are you insane hell no
- mdrzn 7mo agoPeople aren't paying $200 to chat, they're paying to have ClaudeCode or Cowork or Claude for Chrome do the work instead.
- khy34 7mo agoThe question should really be what is the reservation price of existing buyers. At some point the price will rise. But the value has to have risen for existing buyers to be ok with that - but can they perceive the value? Hmmm difficult to tell. Benchmarks are not an objective way to measure that. In the long run google is most likely to acquire a serious cost advantage given their level of vertical integration.
- empath75 7mo agoWe've been experimenting with claude code handling jira tickets and opening PR -- we're starting with Opus. It costs about $1 per PR that gets merged-- how much does it cost to have a software engineer do that PR? That's your price sensitivity. It will only get cheaper as models get more efficient and people get better at using them, though.
- khy34 7mo agoYou’re operating in a micro perspective. Managers of firms care about impact of financials. They don’t care about the metrics you are measuring / gaming. Ultimately all ‘progress’ has to show in the cash flows. Are you taking more cost reduction projects and more revenue-generating projects? Are you actually delivering? Are customers perceiving you to be as trusted as before? Etc. are the only things that matter. ‘Show me the money’. To me this is akin to the discussion re. Scrum, agile etc. Who cares? Show me the money.
- maxdo 7mo agoTotally agree. We cut the scrum this week it is so impractical in the modern world.
- maxdo 7mo agoThis week my spending is > $2000 , and my ceo is very happy, another top user burned $1600. You personally will not pay , but these who will will replace people who are not productive. That’s actually the limiting factor. There will be top 5% of developers who will throw away on the street remaining 95%. No EU socialism will protect the rest . It is very unclear what is the new world market , with no web developers , no custom dashboard teams , no analytics teams , no devops whose role is to babysit human devs. From one side it’s a market for opportunity to automate , but human devs are generators of unlimited inefficiencies. Once the market settles down , the demand for lots of tools will shrink. On my spendings to anthropic . I’m a manager, and top user I burn tokens on tickets creation , planing , even sprint filtering , for sure the most went to coding. Bugs are getting fixed by just sharing a screenshot and a sentence or two of description in 80% of the cases , all the way including to PR creation and making sure release is live and good with tests. There are ways to cut the cost a bit , maybe 30-40% but it’s not practical .
- dgan 7mo agosure, can't wait to see traders having chatGPT license and trying to convince it to explain the P&L lol. But what do I know
- surgical_fire 7mo agoEh? Is the average developer paying 200$ a month? I mean, I imagine some top% vibe coding bros paying 200$. I would require some serious evidence that the average developer pays for it. I certainly wouldn't. It's moderately useful, but not 200$/mo useful.
- Foobar8568 7mo agoPeople forgot the price of full msdn back in the day or any "SDK", Low code shit etc. And I doubt someone can have the cognitive load to follow 10 Claude max. Let alone 1.
- bogzz 7mo agoThe "average" in the YC microcosm, I assume.
- almyk 7mo agoMy work pays for the $200 sub for me. At work in a typical 5h slot I tend to use 35~40% of the usage limit, so the $100 sub wouldn’t let me keep my current workflow and AI usage but I am more often than not using 2x the $100 sub. We’ll see if they keep paying for this or not, because we are not yet sure if using AI like this is sustainable and worth the tech debt of moving faster
- surgical_fire 7mo agoBut that is your employer paying a license (probably in bulk, I have no idea how much B2B sales cost for AI). My employer pays licenses for a lot of things that I probably wouldn't pay personally. The person I was replying to said the average developer pays 200$. I call bullshit on that one.
- maxdo 7mo agoI just payed $2300 this week only. I had a few greenfield projects
- 1tdimhcsb 7mo ago[flagged]
- ReptileMan 7mo agoChances of this startup pulling a Theranos are? I mean data center construction is something that couple of non startup companies do and do it well. What is the problem that they solve? The article is quite light on what they actually do.
- doctorwho42 7mo agoArbitrage most likely. They take money from big players, and probably outsource the different parts of construction, then they hold the capex on their balance sheets instead of the big players
- prasadjoglekar 7mo agoMore WeWork than Theranos. Theranos was a fraud. WeWork was a legit real estate business with a SaaS multiple on valuations.
- zacklee-aud 7mo ago[flagged]
- salawat 7mo agoSeems like you already know the answer, mate.
- terflumble 7mo agoUnless nScale is going to help the Ellisons prop up their borrowing power to consolidate a media empire they're a little late to feeding frenzy.
- energy123 7mo agoI don't get the economics behind building AI DCs in the UK instead of a middle income country near the equator where there's plentiful solar or fossil fuels. Labor and land is expensive, energy is scarce and expensive, and colocation is not that valuable because latency is dominated by compute instead of transmission. But there must be a good reason I am missing.
- vee-kay 7mo ago[dead]
- khy34 7mo agoCountry risk..
- pjmlp 7mo agoSovereignty, the days of peaceful geopoltics are behind us.
- energy123 7mo agoThat's a public good that occurs if the government puts their thumb on the scale with subsidies or regulations, because otherwise the market can't get there itself (example: TSMC building plants in US only because of government incentive). But the Nscale case looks like private investors deciding this is the most profitable place to build it on the margin, which is anomalous.
- tosapple 7mo ago[dead]
- justin66 7mo agoLatency?
- doctorwho42 7mo agoDoes that even really matter with AI? If you already are waiting >1sec for a response/output, what is 0.2 seconds more?
- cmiles8 7mo agoThis is all starting to smell like financial engineering games. Traditionally nobody in their right mind would give a startup billions to build data centers. For a long list of reasons, that’s kinda nuts. However what it does allow all these companies investing to do is fund significant capital expenditure but hide it on their balance sheet. They all know if they funded capex directly it would create a deprecation storm that would tank their future earnings. Instead they give the money to another entity to do the building and magically it’s (the equity) now just an asset on their balance sheet with no deprecation. It’s “worth” a lot as a line item there, but only because the hype driving this financial engineering keeps the shares valuable. Meanwhile the startup isn’t public and thus the fact that it has this massive deprecation on the books is mostly out of sight and out of mind, with some random sky high valuation that’s not based in any normal sense of business reality. That all works great… until the bubble busts of course.
- enraged_camel 7mo ago>> This is all starting to smell like financial engineering games. "Starting to"? :)
- dolphinscorpion 7mo agoA few billion here and there are needed to keep the game going. Small cost of doing business, considering the alternative
- d_burfoot 7mo agoThe business plan makes sense to me. They are a company that is focussed specifically on building AI data centers, which is a huge part of the economy at the moment. The big cloud players know about generic data centers, but there are likely big efficiency wins to be gained by specializing on AI. There is also the geopolitical angle: European countries (and others!) will likely trust a UK-based company more than one of the American BigCos. NVidia is a great partner and investor for them: NScale will buy billions worth of NVDA chips, and also send information and learnings about the unique needs of the market to the chipmaker. That being said, financial engineering tricks like depreciation and tax sheltering are of course hugely important in the global economy. It's likely that NVDA has a lot of cash sitting in Europe that it doesn't want to repatriate because it would have to pay taxes on it.
- TrackerFF 7mo agoMy observation has been that the areas where data centers makes the most sense (colder climate, cheap energy, cheap real-estate, trustworthy countries) to build, are also areas where resistance against data centers has started to gain momentum. The spike in energy prices alone will make building these centers an uphill battle.
- doctorwho42 7mo agoGood, if these multi billion dollar companies can't afford to build a data center that... At the bare minimum doesn't affect their cost of electricity over the next 10 years, nor the infrastructure, then it's totally reasonable for them to resist it. It's not like building data centers is for the common good like building new nuclear power plants or other key infrastructure. Instead it's literally just profit motivated, and not even by consumer spending.
- bigbadfeline 7mo ago> It's not like building data centers is for the common good like building new nuclear power plants If a substantial part of the output of new nuclear plants goes to data centers, then those plants do NOT serve the common good. It's a simple matter about which there should be no confusion.