£1bn GPU-backed loan to build European GPU clusters for contracted AI workloads
This article covers Nscale, an AI startup, signing a £1bn GPU-backed Delayed Draw Term Loan to buy GPU infrastructure for multiple European clusters. The facility aims to underwrite planned deployments in Norway, Portugal, Iceland and the UK and to accelerate delivery of capacity tied to contracted customer workloads.
Nscale, an AI startup, has signed a £1bn GPU-backed Delayed Draw Term Loan to buy GPU infrastructure for multiple European clusters. The facility will underwrite planned deployments in Norway, Portugal, Iceland and the UK and aims to accelerate delivery of capacity tied to contracted customer workloads.
Why it matters
This is one of the larger debt facilities explicitly collateralised by GPUs in Europe, signalling a maturing market for hardware-backed financing as demand for AI compute grows. Using debt to fund capital expenditure on GPUs lets Nscale move faster on deployments without diluting equity, and it demonstrates how asset managers and lenders are finding ways to underwrite physical AI infrastructure.
The announcement follows Nscale’s recent equity financings, including a reported £807.3m Series B and a £317.8m Pre-Series C SAFE, underscoring an aggressive capital strategy that mixes equity and debt to scale capacity.
Inside the product
Nscale describes itself as an AI-native infrastructure platform delivering vertically integrated compute, networking, storage, managed software and AI services from Nscale-owned and colocated data centres. The business targets both large hyperscale hubs and smaller metro clusters designed for low-latency workloads.
Planned cluster locations named in the announcement — Norway, Portugal, Iceland and the UK — reflect an emphasis on low-cost renewable energy and regulatory-compliant jurisdictions. The company recently acquired Future-tech, a European data centre engineering consultancy, and says it has secured multiple customer contracts that the GPU financing will directly support. Those moves position Nscale to offer end-to-end deployment and operations rather than just selling capacity.
Who are the investors?
The GPU Delayed Draw Term Loan was arranged as a debt facility backed by GPU hardware and was described as oversubscribed. The lending package was led by funds managed by PIMCO, Blue Owl and LuminArx Capital Management, with additional support from other asset managers and banks. Goldman Sachs & Co. LLC acted as sole structuring agent and sole placement agent on the transaction.
The structure allows Nscale to draw on the facility to purchase GPU clusters for customers with executed contracts and to provide liquidity for pipeline deployments. For lenders, the GPU-backed security and the delayed draw format limit initial capital exposure while providing a route to finance the rapid procurement cycles common in AI infrastructure projects.
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Founder perspective
In the announcement, Josh Payne, Founder and CEO at Nscale, said:
We’re seeing massive demand for AI infrastructure to support the needs of businesses and consumers. This GPU debt financing is a key step in meeting that demand – backing infrastructure that can be delivered faster and more cost-effectively than industry norms, whether that’s large-scale hubs in Norway to smaller metro clusters built for low-latency workloads.
The bigger picture
The deal illustrates how European AI infrastructure providers are combining equity and bespoke debt to keep pace with customer demand without relying solely on fresh rounds of equity. GPU-backed lending can unlock rapid deployment but also concentrates risk in volatile hardware markets and secondary markets for used GPUs.
For the UK and Europe, transactions like this may accelerate onshore capacity build-out and encourage more institutional capital into physical tech infrastructure. Policymakers and local grid operators will watch such projects closely because large-scale deployments interact with energy systems and planning regimes. For AI investors, the transaction is another signal that hardware financing is becoming a distinct asset class within the tech ecosystem.
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