Nscale, the $14.6bn data centre company backed by Nvidia, carries a significant credit shadow from its predecessor Arkon Energy. Arkon, a Melbourne-based crypto miner, raised $155mn in Series A funding in December 2024 but lost $102mn in 2024, largely due to $19.7mn in staff costs and a $40.8mn warrant liability. This financial strain led to defaults on two loans totaling $110mn from Sandton Capital Partners, a distressed credit investor.

Sandton, which also led Nscale's Series A and B funding, charged Arkon up to 17.5 per cent interest on loans, including a $44mn loan for a bitcoin mining facility sold at a steep discount. The warrants Sandton holds, equivalent to 14 per cent of Nscale's shares, and its continued support through subsequent funding rounds underscore the lasting impact of this troubled past.