In an effort to secure a larger share of its clients' artificial intelligence expenditures, British AI neocloud Nscale has agreed to acquire Anyscale, a software startup that specializes in helping companies scale their AI operations across data centers and servers. The deal is valued at $1.65 billion, according to a Bloomberg report citing an anonymous source.

Anyscale was founded by the same team that created the open-source Project Ray distributed programming framework for Python. Initially, the company developed a platform designed to support projects requiring substantial computing power. However, following the release of GPT-3 in 2022, which thrust AI into the global spotlight, Anyscale shifted its focus. It now offers scaling services for training and serving large language models, data curation, inferencing, reinforcement learning, and other AI-related tasks. The platform is built around Ray and includes developer tools, observability features, and orchestration capabilities.

This acquisition aligns seamlessly with Nscale's strategy of building vertically to address compute needs. The neocloud has already established business lines in energy, data centers, and orchestration software. With the addition of Anyscale, it will now also offer workload management and scaling solutions. "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 stated.

Nscale raised $2 billion in a Series C funding round this March, achieving a valuation of $14.6 billion. Its investors include Nvidia, Nokia, Blue Owl, Dell, and Norwegian industrial conglomerate Aker. The neocloud has been actively deploying that capital, along with various debt raises, to secure compute and data center partnerships with companies such as Microsoft, British Telecom, and Nordcraft.

Anyscale, which was valued at $1.38 billion during its own Series C round in 2022, reported a 70% revenue increase in its most recent quarter compared to the previous one. Nscale has confirmed that Anyscale will continue to operate under its own brand and serve its existing customers. The startup's approximately 200 employees will all join Nscale.