Nvidia reportedly in talks to guarantee debt for Nscale's Anthropic data center

Nvidia is in talks to guarantee billions in debt financing for Nscale's planned data center in West Virginia, which is being built for Anthropic. The Information reported the talks on Thursday, and Bloomberg later corroborated the report. TechCrunch frames it this way: the chipmaker would in essence be co-signing a customer's loans, a sign of how hard the AI industry is working to keep its buildout plans afloat as investors grow jittery about the sums involved.

The proposed arrangement would help Nscale, an AI cloud provider, secure financing for the electricity and construction costs of its West Virginia campus. It would take the form of what is known as a residual value guarantee. According to The Information, Nvidia would step in if Nscale defaulted on construction payments, temporarily take over the facility, and help find a buyer and a new tenant. Nvidia's earlier support for cloud providers has mostly covered leases and chip purchases, not construction.

Anthropic has signed a $44.6 billion contract for the project's first building alone, according to Nscale's IPO filing. That 460-megawatt building 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. Nscale is seeking to go public at a valuation of up to $35 billion, despite growing concerns about its ability to deliver on ambitious data center projects.

Nscale has struggled to get projects off the ground. It had about 25,000 advanced AI chips running in August, a fraction of the nearly 500,000 it plans to deploy. Runoff from the West Virginia construction site has flooded nearby homes more than once, and the project won state certification in September after months of negotiations. This month Microsoft pulled out of a planned Nscale site in England after grid power for it was pushed into the 2030s.

Nvidia is already a major financial backer of the sector. According to The Information, it 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 pressure from investors: 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 while helping secure a major customer for its chips. Anthropic, one of the largest buyers of AI computing power, has spread its infrastructure spending across multiple chipmakers. One investor told The Information that Anthropic's involvement likely explains Nvidia's interest in keeping Nscale's project on track.

The talks also come as Anthropic faces questions about how it will finance its own expansion. The company filed to go public this week, but Blackstone has warned investors that Anthropic may receive a below-investment-grade credit rating after its IPO. A junk rating would raise Anthropic's borrowing costs and could push it to keep relying on stronger partners to back its debt.

Key facts

Nvidia is reportedly in talks to guarantee billions in debt for Nscale's West Virginia data center, via a residual value guarantee on construction payments (The Information, corroborated by Bloomberg).
Anthropic has signed a $44.6 billion contract for the project's first 460-megawatt building, per Nscale's IPO filing; a second deal worth roughly $45 billion for another building is under discussion.
Under the guarantee, Nvidia would step in if Nscale defaulted, temporarily take over the facility and help find a buyer and new tenant; its earlier support mostly covered leases and chip purchases.
Nscale is seeking to go public at a valuation of up to $35 billion, had about 25,000 chips running in August against nearly 500,000 planned, and saw Microsoft pull out of a planned England site this month.
Blackstone has warned that Anthropic may get a below-investment-grade credit rating after its IPO, which would raise its borrowing costs.

Why it matters

A chipmaker guaranteeing a customer's construction debt goes beyond what Nvidia has done so far: its earlier support for cloud providers has mostly covered leases and chip purchases, not construction. TechCrunch reads the move as a sign of how hard the AI industry is working to keep its buildout plans afloat while investors grow jittery about the amounts involved. The scale is large: $44.6 billion for one building, a possible second deal of roughly $45 billion, and roughly $170 billion in investments and credit support that Nvidia has already extended to neoclouds and large customers, according to The Information.

Who it affects

Nscale, which needs financing for electricity and construction at its West Virginia campus and is seeking an IPO valuation of up to $35 billion. Anthropic, the customer behind the contract, which has also filed to go public and may face a below-investment-grade rating, according to Blackstone's warning to investors. Nvidia, which would take on the risk of a default and would help secure a major buyer of its chips. Neocloud investors are affected too: CoreWeave, Nebius and IREN shares had each fallen more than 30% in October as of last week, per CNBC. Residents near the construction site are part of the story as well, since runoff has flooded nearby homes more than once.

How to use it

This is a financing story, not a product, so there is nothing to adopt. Readers following the sector can watch for the open points in the reporting: whether the guarantee is agreed, whether the second deal of roughly $45 billion for another building goes ahead, how Nscale's IPO and Anthropic's IPO play out, and whether Anthropic receives the below-investment-grade rating Blackstone has warned about.

How solid is it

The core claim is reported rather than announced. The Information broke it, and Bloomberg later corroborated it. The mechanism (Nvidia stepping in on default, taking over the facility, finding a buyer and tenant) is attributed to The Information. The $44.6 billion contract figure comes from Nscale's IPO filing. The amount to be guaranteed is given only as billions. No confirmation from Nvidia, Nscale or Anthropic is quoted, and the arrangement is described as proposed and in talks, not signed.

Risks and caveats

The risks sit on several sides. Nscale has about 25,000 chips running against nearly 500,000 planned, the West Virginia site has had flooding from construction runoff, and Microsoft pulled out of a planned Nscale site in England after grid power for it was pushed into the 2030s. If Nscale defaulted, Nvidia would have to take over the facility and find a buyer and tenant. On the customer side, a junk rating would raise Anthropic's borrowing costs and could push it to keep relying on stronger partners to back its debt. One unnamed investor told The Information that Anthropic's involvement likely explains Nvidia's interest; that is one investor's reading, not a stated Nvidia position.

“In essence, the chipmaker would be co-signing a customer’s loans, a sign of how hard the AI industry is working to keep its buildout plans afloat as investors grow jittery about the amounts of money involved.”

— TechCrunch