Ltd. is facing opposition to the valuation target it’s pursuing in its initial public offering, according to people familiar with the matter, after a series of market setbacks for artificial intelligence companies.

The Nvidia Corp.-backed data center developer has been seeking an IPO valuation of about $30 billion, the people said. A cohort of investors have lately urged that a valuation in the $16 billion to $19 billion range would be more likely to find favor with buyers, in light of factors including the implosion of Australian AI data center company Firmus’ IPO plan, some of the people said.

A disconnect over valuation would add to recent challenges facing Nscale’s planned IPO. Microsoft Corp., an investor in the company as well as a client, pulled out of a UK data center deal with Nscale, the company said on Sunday, after the site was contending with delays from power constraints.

Sentiment toward AI infrastructure companies including chipmakers and cloud computing firms has turned as borrowing costs have risen and uncertainty over the technology’s long-term payoff has grown.

A discrepancy in expectations between a company seeking an IPO and potential investors can pressure a firm to slow down the process. The so-called valuation gap may reflect differing outlooks on where funding costs are likely to go and whether challenges to the broader sector may be quickly resolved.

Nscale filed publicly for a US listing on Sept. 18, and has yet to begin formal marketing even though the required 15 day waiting period has elapsed. The company is working through comments from the US Securities and Exchange Commission on its filing, and intends to kick off marketing when those are resolved, people familiar with the matter said.

Deliberations are ongoing, details of the IPO plan could change and no final decisions have been made, the people said, asking not to be identified as the information isn’t public. A representative for Nscale declined to comment. The SEC didn’t immediately respond to a request for comment outside normal office hours.

The London-based firm raised $3.36 billion in a pre-IPO financing round last month in a deal led by Dan Loeb’s Third Point with investors including Nvidia, Apollo Global Management Inc., Citadel, Hudson Bay Capital and Abu Dhabi Investment Council participating.

Stock prices for several of Nscale’s peers have been battered. CoreWeave Inc. wiped out a quarter of its market value last week as a measure of its credit risk climbed to an all-time high, and Nebius Group NV’s stock slumped 32% in the past two weeks.

Nscale, which is developing data centers in locations including Norway and West Virginia, was expected to raise as much as $3 billion in its IPO, Bloomberg News reported in August. The Norway facility, just north of the Arctic Circle, is billed as a flagship site for the British data-center developer, but construction is six months behind schedule, set back by leaks in the cooling system, local regulations, construction delays and a fire, Bloomberg News reported.

Bankers have faced a cocktail of risks which is threatening to stall the IPO market for deals outside of Anthropic PBC after smart-ring maker Oura Inc. and Bamboo Insurance Services Inc. were forced to postpone debuts as interest rates climbed higher and the Iran war dragged on. The expectation that the Anthropic could meet or exceed SpaceX’s record-setting debut as soon as next month has also presented a hurdle for Wall Street.