Fire, Coolant Leaks and an Empty Floating Hotel: Nscale's Norway Flagship Slips Six Months Before Its IPO

Fire, Coolant Leaks and an Empty Floating Hotel: Nscale's Norway Flagship Slips Six Months Before Its IPO

Norway flagship is six months behind

Nscale, the British AI cloud provider, plans to list on the New York Stock Exchange under the ticker NSCL as soon as this month, raising up to $3 billion at a valuation of as much as $35 billion. But Bloomberg reported on October 15 that its flagship data centre at Glomfjord, Norway, is running about six months late: only 6.4 megawatts of the planned 30-megawatt site is live. The company was spun out of crypto miner Arkon Energy in early 2024 and files Glomfjord as a flagship asset.

Coolant leaks and a transformer fire

Citing public records and people close to the project, Bloomberg reported that faulty pipe sealant and a filter problem caused repeated cooling-system leaks that forced workers to shut down rows of servers. The system was replaced in June; another significant leak occurred in September because of human error. In December 2025, a transformer burned, prompting an investigation by Norway's civil protection directorate.

Ten safety violations, case closed in September

The Norwegian agency identified 10 safety violations after the fire, including failures to ground exposed high-voltage components. Nscale fixed them and the inspection case was closed in September. Separately, Norway's water and energy regulator, NVE, said on September 29 that Nscale began building at Kvandal, near Narvik, without filing the required surplus-heat cost-benefit analysis, ordering it to submit one by November 15 or face a coercive fine.

Workers to be housed on a floating hotel

To pull the schedule forward, Nscale towed the three-storey floating hotel Kalmar — previously used to detain migrants — into Glomfjord. Its roughly 220 bedrooms were still empty in early October, waiting for hundreds of construction workers. Bloomberg's report paired "angry workers" with the fire in its headline, and TechFlow's summary of the story cited employee complaints. Public material does not go much deeper than that on the workers' specific grievances.

Delay penalties became negotiating leverage

The delays have produced contractual penalties. Bloomberg reported that at Glomfjord, built for ByteDance, the overrun left Nscale on the hook for penalties totalling millions of dollars; at the Start Campus complex in Sines, Portugal, where it leases space, delays generated millions of dollars in penalties owed to Microsoft on paper. Instead of collecting, customers were offered more favourable terms in later contracts.

The company says the site is operating

Nscale's community page describes Glomfjord as an "operational, modern AI infrastructure facility" redeveloped on a brownfield industrial site, crediting it with local jobs and with reused waste heat piped to a neighbouring fish farm. Its S-1 warns that customer contracts carry performance milestones, service-level requirements and delay penalties that could trigger substantial payments. On its Loughton project in the UK, the company said it remains committed and is studying on-site generation and ways to speed up grid connection.

A $35 billion valuation on unbuilt capacity

The S-1 was filed on September 18, targeting up to $3 billion and a valuation of as much as $35 billion — more than double the $14.6 billion valuation of its $2 billion March Series C. Goldman Sachs, J.P. Morgan and Morgan Stanley lead the offering. The starkest line in the filing: of $103.4 billion in total contract value, only $2.6 billion was active as of the end of August, and the company says its built or leased capacity amounts to less than 1% of its targeted capacity.

$1.02 billion loss on $140.6 million revenue

For the six months to June 30, Nscale posted revenue of $140.6 million, up from $10.4 million a year earlier, against a net loss of $1.02 billion, versus $368.9 million a year earlier. Cost of revenue was $189.6 million, meaning it booked a gross loss before depreciation. Total contract value is $103.4 billion, anchored by Microsoft at about $43.8 billion through December 2033 and Anthropic at roughly $44.6 billion — about 85% of the book between them. As of August 31, about 25,000 GPUs were active against 461,000 active or contracted.

The Anthropic deal is signed but unfunded

CNBC and Bloomberg reported that Anthropic signed a roughly $45 billion, six-year cloud capacity agreement in August, leasing about 460 megawatts at Nscale's Monarch campus in West Virginia on Nvidia's Vera Rubin chips, due online in late 2027. Reporting since has noted that the build behind that contract is not yet financed.

In the UK, grid power may not arrive until the 2030s

Power is the other bottleneck. The Guardian reported on September 24 that the Loughton site in Essex, originally due to launch in 2027, may not get enough electricity until the early to mid-2030s, according to UK Power Networks; the site is seeking up to 90 megawatts. Ofgem said in June that 315 data centres were queued for grid connections seeking 73 GW, more than the UK's 45 GW peak demand. Bloomberg also reported that extra grid capacity for Korgen, Norway, is unlikely before 2037.

Pricing unknown, November brings funding and regulatory deadlines

Next come the price range, still blank in the filing, and the $3.36 billion convertible financing announced on September 25 — including a $1 billion Nvidia commitment expected in mid-November, converting automatically when the IPO closes. NVE's November 15 deadline lands in the same window. For Nscale, the harder task is turning $103.4 billion of paper contracts into powered halls — faster than it can convince investors it will.