British AI neocloud Nscale is acquiring software startup Anyscale for $1.65 billion as part of its strategy to deepen its control over the AI computing stack. Anyscale specializes in enabling companies to efficiently scale AI workloads across data centers and servers. The acquisition aligns with Nscale’s ambition to extend its vertically integrated offerings by combining hardware, data centers, and now advanced workload management software under one umbrella.

Anyscale was founded by the creators of the open source Project Ray framework and initially built a platform to support projects requiring substantial computing power. Following GPT-3's breakthrough in 2022, the company shifted focus toward services that scale AI training, inference, and reinforcement learning tasks for large language models. It provides tools for developers, monitoring, and orchestration built around the Ray ecosystem, catering to the surging demand for AI scalability.

Nscale’s acquisition of Anyscale complements its existing portfolio, which spans energy, data centers, and orchestration software, by adding robust AI workload scaling capabilities. This integration allows the combined entity to co-develop infrastructure and software layers, aiming for enhanced optimization that neither company could achieve independently. This move started to take shape after Nscale raised $2 billion in a Series C funding round earlier this year, putting its valuation at $14.6 billion, attracting investments from major players such as Nvidia and Dell.

Anyscale will maintain its brand identity and continue serving current clients even after the acquisition, with its roughly 200 employees joining Nscale. The startup has shown strong growth, with a 70% revenue increase in its latest quarter compared to the prior period. Nscale’s recent strategic partnerships with industry giants like Microsoft and British Telecom underscore its commitment to expanding AI infrastructure capabilities and supporting the growing AI market.