British AI neocloud Nscale has acquired Anyscale, a software startup that helps companies scale AI workloads across data centers and servers, for $1.65 billion. Bloomberg first reported the price, citing an anonymous source. The deal adds workload management and scaling capabilities to Nscale's existing business lines in energy, data centers, and orchestration software.
A vertical build for AI compute
Nscale, which raised $2 billion in a Series C round in March at a $14.6 billion valuation, has been busy putting that money to work. The company's investors include Nvidia, Nokia, Blue Owl, Dell, and Norwegian industrial giant Aker. Nscale also maintains compute and data center partnerships with Microsoft, British Telecom, and Nordcraft, funded in part through various debt raises.
Anyscale was valued at $1.38 billion in its own 2022 Series C round. The startup was founded by the same team that built Project Ray, an open-source distributed programming Python framework. Anyscale's platform is built around Ray, offering developer tools, observability, and orchestration. Originally designed for projects needing large computing power, the company pivoted after GPT-3 launched in 2022 to focus on scaling for LLM serving and training, data curation, inferencing, and reinforcement learning.
"Together, Anyscale and Nscale can co-design the software layer and infrastructure beneath it, something that neither company could do as effectively by optimizing its layer alone," Anyscale said in a statement.
What the deal means
Anyscale will continue to operate under its own branding and serve existing customers. Its approximately 200 employees are all joining Nscale. The acquisition fits neatly into Nscale's focus on vertical integration for compute needs, giving the neocloud ownership of both the infrastructure and the software layer that manages workloads across it.
Anyscale's revenue increased 70% in its most recent quarter compared to the previous sequential quarter, signaling strong demand for its AI workload management tools. The company's platform, built on Ray, has become a key piece of infrastructure for organizations training and serving large language models.
Nscale's expanding footprint
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Nscale describes itself as a British AI neocloud, an alternative cloud provider focused specifically on AI compute. Its business lines span energy, data centers, and orchestration software. With the addition of Anyscale, Nscale now also controls the workload management and scaling layer that sits between developers and the underlying hardware.
The company's Series C round in March, which included participation from Nvidia, Nokia, Blue Owl, Dell, and Aker, valued Nscale at $14.6 billion. That valuation reflects investor appetite for companies that provide the physical and software infrastructure needed to run AI workloads at scale.
The Anyscale story
Anyscale's journey began before 2022, when its founding team built Project Ray, an open-source distributed computing framework for Python. The startup initially built a platform for general large-scale computing projects. But the launch of GPT-3 in 2022 changed the landscape. Anyscale pivoted to focus on AI workload scaling, raising its Series C at a $1.38 billion valuation that same year.
The company's platform now handles LLM serving and training, data curation, inferencing, and reinforcement learning. Its tools give developers observability into distributed AI jobs and orchestration capabilities to manage resources across clusters.
A busy year for Nscale
The acquisition comes after a period of rapid expansion for Nscale. The company has used its Series C funds and debt raises to secure compute and data center partnerships with major players including Microsoft, British Telecom, and Nordcraft. The Anyscale deal gives Nscale a software layer that can optimize how those resources are used.
With Anyscale's 200 employees joining and the startup's revenue growing 70% sequentially, Nscale gains both talent and momentum in the AI infrastructure market. The deal is expected to close in the coming months.