The negotiations and the structure of the guarantee
Nvidia would be in talks to guarantee billions in debt financing for the data center that cloud provider Nscale plans to build in West Virginia for Anthropic. The news, reported Thursday by The Information, was later confirmed by Bloomberg, according to TechCrunch. According to the cited sources, this is a residual-value guarantee: if Nscale failed to pay construction costs, Nvidia would temporarily take over management of the facility and help find a buyer and a new tenant.
The new element compared with the past concerns the object of the coverage. Until now, Nvidia's support for cloud providers had mainly concerned leases and chip purchases, not construction costs. The guarantee under discussion would instead serve to unlock financing for the campus's electricity and construction expenses.
Why Nvidia is involved
The link between the parties is commercially significant. Anthropic has signed a $44.6 billion contract for the first building of the project, according to Nscale's listing document; the 460-megawatt property is expected to use Nvidia's next-generation Vera Rubin chips. The companies are also reportedly discussing a second agreement worth about $45 billion for another building.
An Nvidia guarantee would help Nscale complete a project that also serves as an outlet for the manufacturer's chips, while Anthropic is described as one of the largest buyers of AI compute. An investor cited by The Information links Nvidia's interest in keeping the project on track precisely to Anthropic's presence as a customer.
Nscale's difficulties and investor caution
Nscale aims to go public at a valuation of up to $35 billion, but the material cited points to execution delays. In August, the company had about 25,000 advanced AI chips in operation, a fraction of the nearly 500,000 planned. The West Virginia construction site has also had problems: water runoff has repeatedly flooded nearby homes, and only in September did the project obtain state certification after months of negotiations. This month Microsoft withdrew from a planned site in England because grid power would not be available until after 2030.
The financial context is tense. According to The Information, Nvidia has extended about $170 billion in investments and credit support to cloud providers and major customers, including $1 billion in convertible financing committed to Nscale in September. Compute rental companies are under pressure: shares of CoreWeave, Nebius and IREN, CNBC reports, were all down more than 30% in October through the previous week.
Open questions
Several elements remain to be verified: the talks are not reported as concluded nor with defined amounts, and it is unclear what conditions would accompany the guarantee. TechCrunch also recalls that Anthropic filed listing documentation this week, but Blackstone has warned investors that after the IPO the company could receive a credit rating below investment grade; such a rating would increase financing costs and could push it to rely on stronger partners to support its debt.
