According to Sifted, Nscale secured a £500 million investment from Nvidia less than two years ago and was positioned to deliver the UK’s version of the “Stargate” AI infrastructure project. The data centre startup is now facing serious operational questions after details emerged about a copyright lawsuit it lost against two former employees, Elio van Puyvelde and Kian Mohadjerin, over software called “Paiton”. The Dutch court rejected Nscale’s claims and ordered the company to pay nearly £7,000 in costs. Separately, Nscale publicly announced acquiring Kontena in a blog post and industry press, but CEO Jef Laurijssen now confirms “Nscale does not own Kontena” and the deal never completed. UK shadow secretary Julia Lopez says these findings show why the government must scrutinize key players in the AI infrastructure space more carefully.
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Startup soap opera
Here’s the thing about fast-growing startups – sometimes the internal drama is more compelling than the business plan. Nscale’s story reads like a Silicon Valley script. You’ve got the former CIO and his business partner allegedly calling someone a “greedy little man” in Slack messages. You’ve got a copyright lawsuit that basically backfired when the court discovered the code in question was on GitHub before the developer even started at Nscale. And then there’s the whole “we acquired this company but actually we didn’t” situation. It’s messy, and when you’re talking about a company that’s supposed to be building Britain’s AI future, that messiness matters.
Government gamble
What’s really concerning here is how much the UK government is betting on this particular horse. We’re not talking about some random startup here – this is the company tasked with building the country’s biggest ever supercomputer. The British version of Stargate, which in the US is a multi-billion dollar project. And now we’re learning that behind the scenes, there’s infighting, failed deals, and legal battles they’re losing. Julia Lopez isn’t wrong to be raising eyebrows. When the future of your national AI strategy rests on a company that can’t seem to get its basic operations straight, that’s… concerning.
Nvidia’s position
Now let’s talk about the elephant in the room – Nvidia’s half-billion pound investment. You have to wonder what due diligence they did before writing that check. Or maybe they’re just playing the long game and these operational stumbles don’t matter in the grand scheme? Either way, it’s awkward for everyone involved. Nvidia declined to comment, which isn’t surprising, but you can bet they’re watching this unfold very carefully. When your brand is attached to something this high-profile, every misstep reflects on you too.
Broader implications
This situation highlights a much bigger problem in the AI gold rush. Everyone’s chasing the next big thing, throwing money at companies that promise to deliver critical infrastructure. But are we asking the right questions? Are we looking beyond the hype and the funding announcements? Nscale’s story suggests maybe we’re not. When a company can announce an acquisition that never actually happens and nobody notices for months, that tells you something about how closely these critical infrastructure players are being watched. And honestly, that’s kind of terrifying when you think about how much depends on them getting it right.
