Nvidia may cosign Nscale's loans for an Anthropic data center in West Virginia

Nvidia is discussing guaranteeing billions of dollars in debt financing for a data center that cloud provider Nscale is building in West Virginia for Anthropic, The Information reported, with Bloomberg later confirming the report. According to Nscale's IPO filing, Anthropic has signed a $44.6 billion contract for the campus's first building alone.

In effect, the chipmaker would be cosigning its own customer's loans. It is a sign of how hard the AI industry is working to keep its infrastructure plans on track as investors grow increasingly uneasy about the sums involved.

How the deal would work

The arrangement would help Nscale raise money for the campus's electricity and construction. It takes the form of a so-called residual value guarantee: if Nscale defaulted on construction payments, Nvidia would temporarily take over the facility and help find a buyer and a new tenant. Until now, Nvidia's support for cloud providers has mostly covered leases and chip purchases rather than construction.

Anthropic's contract covers the first 460-megawatt building, which is expected to run Nvidia's next-generation Vera Rubin chips. The companies are also discussing a second deal, worth roughly $45 billion, for another building.

Nscale's troubles

The stakes are high for Nscale, which is preparing an IPO at a valuation of up to $35 billion despite mounting doubts about its ability to deliver on ambitious projects. In August it had about 25,000 advanced AI chips running — a small fraction of the nearly 500,000 it plans to deploy. The West Virginia site has had problems of its own: runoff from construction has flooded nearby homes more than once. In September, after months of negotiations, the project won state certification. And this month Microsoft pulled out of a planned Nscale site in England after its grid connection was pushed into the 2030s.

Nvidia as the industry's lender

According to The Information, Nvidia has extended roughly $170 billion in investments and credit support to neoclouds and large customers, including $1 billion in convertible financing committed to Nscale in September. Neoclouds, which rent out AI computing power without a cash-rich core business behind them, are under investor pressure: CNBC reported that shares of CoreWeave, Nebius and IREN had each fallen more than 30% in October as of last week.

The guarantee would deepen Nvidia's financial ties to Nscale and help secure a major buyer for its chips. Anthropic, one of the largest consumers of AI compute, spreads its infrastructure spending across several chipmakers. One investor told The Information that Anthropic's involvement likely explains Nvidia's interest in the project.

Anthropic itself faces questions about how it will fund its rapid growth. The company filed to go public this week, but Blackstone has warned investors that Anthropic may receive a below-investment-grade credit rating after the listing. Such a rating would raise its borrowing costs and could push it to keep relying on stronger partners willing to back its debt.

Source: TechCrunch