The key facts

  • Nvidia is discussing a residual value guarantee on Nscale's debt for the West Virginia project
  • Anthropic signed a $44.6 billion contract for the first campus building; a second deal of about $45 billion is under discussion
  • Nscale is preparing for an IPO with a valuation of up to $35 billion but has only a small fraction of its planned capacity

Talks over a guarantee

Nvidia is in talks to provide guarantees on billions of dollars of debt financing for a planned Nscale data center in West Virginia intended for Anthropic. The Information reported this, and Bloomberg later confirmed the information. The mechanism in question is a residual value guarantee: if Nscale fails to meet its construction payment obligations, Nvidia would temporarily take control of the facility and help find a buyer and a new tenant. The guarantee is meant to help Nscale finance electricity and campus construction costs.

The scale of the project and a new type of support

The stakes are high: according to Nscale's IPO filings, Anthropic signed a contract worth $44.6 billion for just the first building of the campus — a 460 MW facility that is planned to be equipped with Nvidia's next-generation Vera Rubin chips. The companies are also discussing a second deal worth roughly $45 billion for another building. It is editorially important that Nvidia's previous financial support for cloud providers covered mainly leases and chip purchases, but not construction: guaranteeing a client's construction would be a new step, deepening Nvidia's financial ties with Nscale while also protecting demand for its chips. One investor, speaking to The Information, suggested that it is Anthropic's involvement that explains Nvidia's interest in the project's fate.

Nscale's difficulties and market jitters

Nscale's position remains vulnerable: the company is preparing for an IPO with a valuation of up to $35 billion amid doubts about its ability to deliver on ambitious projects. In August it had about 25,000 advanced AI chips in operation — a small fraction of the nearly 500,000 it plans to deploy. Construction in West Virginia has also had problems: runoff from the site repeatedly flooded neighboring houses, and in September, after months of negotiations, the project received state certification. This month Microsoft backed out of an Nscale site in England, because the grid connection had slipped into the 2030s. The guarantee talks are taking place against a backdrop of general investor nervousness: according to CNBC, shares of CoreWeave, Nebius and IREN fell more than 30% in October.

Context: Nvidia has already put in about $170 billion

Nvidia is already a major financial backer of the sector: according to The Information, it has provided about $170 billion in investments and credit support to 'neoclouds' and major customers, including $1 billion of convertible financing for Nscale in September. Anthropic, in turn, filed for an IPO this week, but, as reported, Blackstone warned investors that after the IPO the company could receive a rating below investment grade — a 'junk' rating would raise Anthropic's borrowing costs and could push it to rely even more on stronger partners when raising debt.