Nscale, the Nvidia-backed AI cloud provider, buried a significant relationship with ByteDance in its pitch to investors, only mentioning the Chinese tech giant in an obscure filing despite its accounting for nearly three-quarters of its sales last year.
Beijing-based ByteDance was one of the first major customers for Nscale’s nascent cloud-computing business, renting access to advanced Nvidia AI chips in Norway, according to people familiar with the matter and SEC filings.
But their relationship was indicated only in a document published on Friday alongside Nscale’s main filing for a US initial public offering that did not directly mention ByteDance by name.
Nscale emerged in 2024 as a rival to so-called neoclouds such as CoreWeave and Nebius, as demand for AI computing power surged. It quickly attracted significant funding, as well as big-name board members including former UK deputy prime minister Nick Clegg, former Meta executive Sheryl Sandberg and Berkshire Hathaway director Susan Decker.
Its multimillion-dollar deal with ByteDance helped jump-start the London-based company’s journey to a New York IPO little more than two years after the company launched. Over the past 12 months, it has gone on to sign much larger multibillion-dollar contracts with Microsoft and Anthropic.
ByteDance used Nscale’s cloud facility in Norway to access Nvidia chips that it would otherwise have been unable to buy in China, exploiting a loophole in US trade restrictions, according to filings. Chinese tech companies have poured billions into AI and often turned to foreign cloud computing providers to train their models.
The arrangement is entirely legal but exposes companies such as Nscale to regulatory and reputational risks, at a time when the US and China are engaged in a high-stakes race to dominate the fast-growing technology.
Nscale declined to comment.
Nscale said in its IPO filing last week that a single unnamed customer contributed 73 per cent of its $33mn in revenue last year.
Although Nscale does not mention ByteDance anywhere in its 192-page S-1 filing, a loan agreement in a supporting exhibit names a Singapore entity, Spring (SG) Pte Ltd, as a significant customer. People close to the company confirmed Spring was a ByteDance subsidiary and that the TikTok parent was Nscale’s largest source of revenue in 2025.
The two companies’ relationship began soon after Nscale split from its Australian bitcoin miner parent and started pitching for cloud computing customers.
The SEC filings show Nscale in May 2025 signed a contract with Spring, which agreed to rent 2,304 of Nvidia’s advanced B200 chips from the UK group’s data centre in Glomfjord, Norway.
Spring is listed on Apple and Google’s app stores as the developer of Trae and Dola, two of ByteDance’s AI apps. Regulatory filings in Singapore also link Spring to ByteDance staff and other international affiliates.
ByteDance’s commitment underpinned a $105mn loan to Nscale from Macquarie, which, along with $35mn in equity, funded the purchase of the Nvidia B200 chips. The first tranche of the loan was drawn in August 2025.
The deal marked a turning point for Nscale, which at that point was roughly a year old. The following month, it struck a major deal with Microsoft and Nvidia. Jensen Huang, Nvidia’s chief executive, lauded Nscale as a “national champion” for the UK and committed to invest some £500mn into Nscale as part of a deal to sell it hundreds of thousands of AI chips.
Nvidia’s support has only grown since, now totalling more than $2bn in commitments, and a separate $860mn guarantee of Nscale’s lease obligations at a facility in Texas, according to Nscale’s IPO paperwork.
For neoclouds hunting for anchor tenants to underwrite expensive infrastructure build-outs, Chinese tech groups have proved lucrative customers. But it remains a geopolitically fraught strategy. A short seller attacked Japanese neocloud Datasection after discovering its relationship with Tencent, though the company maintained it was fully compliant with US export control laws.
The US Congress is also trying to close the loophole that allows Chinese companies to rent AI chips abroad. Biden-era rules were poised to close it but were scrapped by President Donald Trump in May 2025.
Macquarie, for instance, required Nscale to monitor how ByteDance used the chips, routinely assessing the deployment for “compute anomalies or suspicious configurations” that might signal a breach of export controls, according to the filing. It is obliged to report anything suspicious to the bank.
Nscale conducted a third-party due diligence assessment on ByteDance, including Spring, to ensure the deployment was in compliance with applicable laws, according to people familiar with the matter.
One of the people noted that obligations to customers also limited what could be disclosed.
“It is important for potential investors in an IPO, to be able to assess both the market for the company’s services and the risks the company faces,” said Lucian Bebchuk, professor of law, economics and finance at Harvard Law School. Investors unaware of a company’s big Chinese customer would be in the dark about material aspects of the company’s prospects, he added.
While Nscale’s IPO filing does not name ByteDance directly, it warns investors in its risk factors that tighter US export controls, including proposed limits on Chinese entities’ cloud-based access to Nvidia chips, could restrict its ability to serve key customers.
It further warned that investors, partners and customers might view its dealings with Chinese customers and desire to expand in Asia as a reputational risk.
Nscale’s bet on China was underscored by its hiring of former Alibaba Cloud executive Jing Yin, around the same time as it was developing its ByteDance contract. Yin was granted options for 5 per cent of the company and promised a board seat. Including stock awards, he was Nscale’s highest-paid executive last year, ahead of chief executive and co-founder Josh Payne, though Yin is not currently on the board.
The ByteDance deal formed a vital stepping stone for Nscale, which now has computing deals worth up to $44bn with Microsoft and $45bn with Anthropic over several years. Nscale said sales from its largest customer would fall to less than 20 per cent of its revenue this year and shrink further as the big American contracts expand.
Macquarie declined to comment. ByteDance and Nvidia did not respond to a request for comment.
Additional reporting by George Steer in New York
