Nvidia in talks to back Nscale debt for Anthropic data centre in West Virginia

Centre · 2Nvidia is in talks to offer AI cloud provider Nscale billions of dollars in credit guarantees to support debt funding for a data centre earmarked for Anthropic, The Information reported on Thursday 29 October, citing people with knowledge of the talks. 1 2 Centre · 2The support would help fund power infrastructure and construction at Nscale's West Virginia campus. According to the report, the deal has not been signed and terms could still change. 1 2 Centre · 1TechCrunch, citing The Information, said the arrangement would be a residual value guarantee: if Nscale defaulted on construction payments, Nvidia would step in, temporarily take over the facility and help find a buyer and new tenant. It added that Bloomberg later corroborated the report, and that Nvidia's earlier support for cloud providers has mostly covered leases and chip purchases, not construction. 2

Centre · 2Nvidia, Nscale and Anthropic did not immediately respond to Reuters requests for comment. Nvidia is an investor in the UK-based Nscale, and committed $1 billion in convertible financing to it in September, according to The Information. 1 2 Centre · 2Anthropic struck a deal in August to spend $45 billion renting computing power from Nscale's West Virginia campus; TechCrunch cites Nscale's IPO filing as putting the contract for the first building at $44.6 billion. That building is 460 megawatts and expected to use Nvidia's Vera Rubin chips, and the companies are discussing a second deal worth roughly $45 billion for another building. 1 2 Centre · 2The talks come as investors worry about debt financing behind the AI build-out. CNA's Reuters copy notes that Nvidia-backed CoreWeave and Firmus have been hit by such concerns, and TechCrunch says CoreWeave, Nebius and IREN shares each fell more than 30% in October as of the previous week, per CNBC. 1 2

Centre · 1TechCrunch adds context on Nscale's position: it is seeking an IPO at a valuation of up to $35 billion, had about 25,000 advanced AI chips running in August against a plan for nearly 500,000, and saw Microsoft pull out of a planned English site after grid power was pushed into the 2030s. Runoff from the West Virginia construction site has flooded nearby homes more than once, and the project won state certification in September. 2 Centre · 1TechCrunch also reports that Nvidia has extended roughly $170 billion in investments and credit support to neoclouds and large customers, per The Information, and that one investor attributed Nvidia's interest to Anthropic's involvement. It notes Anthropic filed to go public this week and that Blackstone has warned investors it may receive a below-investment-grade credit rating after its IPO, which would raise its borrowing costs. 2