Nvidia in Talks to Back Nscale's West Virginia AI Data Center Debt

Nvidia is negotiating to guarantee billions in debt financing for AI cloud provider Nscale's planned Anthropic data center in West Virginia, according to reports from The Information and Bloomberg.

Under a residual value guarantee, Nvidia would step in if Nscale defaulted on construction payments, temporarily take over the facility, and help find a buyer and new tenant. Anthropic has signed a $44.6 billion contract covering the first 460-megawatt building at the campus, which is expected to use Nvidia's next-generation Vera Rubin chips. The companies are also discussing a second deal worth roughly $45 billion for another building.

The arrangement would help Nscale cover electricity and construction costs. Nvidia's earlier support for cloud providers has mostly covered leases and chip purchases, not construction. The chipmaker committed $1 billion in convertible financing to Nscale in September and has extended roughly $170 billion in investments and credit support to neoclouds and large customers.

Nscale is seeking to go public at a valuation of up to $35 billion despite concerns about its ability to deliver on ambitious projects. It had about 25,000 advanced AI chips running in August, a fraction of the nearly 500,000 it plans to deploy. Its West Virginia campus has seen construction runoff flood nearby homes more than once, though the project won state certification in September. This month, Microsoft pulled out of a planned Nscale site in England after grid power for it was pushed into the 2030s.

Neoclouds have come under investor pressure, with shares of CoreWeave, Nebius, and IREN each falling more than 30% in October as of last week. Anthropic filed to go public this week, and Blackstone has warned investors that the company may receive a below-investment-grade credit rating after its IPO.

Source: TechCrunch