Nvidia Weighs Debt Guarantee for Nscale's West Virginia AI Data Center

Nvidia is in negotiations to provide debt guarantees for Nscale, an AI cloud provider planning a large data center campus in West Virginia for Anthropic, The Information reported, with Bloomberg later confirming the discussions. The arrangement would involve Nvidia co-signing or supporting billions of dollars in financing tied to the project’s construction and electricity costs, a step that would deepen Nvidia’s financial exposure to an ambitious AI infrastructure buildout at a time when investors are becoming more cautious about the sector’s mounting capital needs. Under the proposed structure, sometimes described as a residual value guarantee, Nvidia would intervene if Nscale failed to meet construction-related payment obligations. The chipmaker could temporarily take over the facility and assist in finding a new buyer or tenant. Nvidia’s prior financial support for cloud providers has generally focused on leases and chip purchases rather than direct backing for construction projects, making the proposed deal a more direct extension of its role in financing the AI supply chain. The West Virginia project is central to Nscale’s expansion plans. Anthropic has signed a $44.6 billion contract covering the campus’s first 460-megawatt building, which is expected to use Nvidia’s next-generation Vera Rubin chips. The two companies are also discussing a second agreement worth about $45 billion for another building. Anthropic’s involvement appears to be a key reason Nvidia is willing to support Nscale’s financing, as the AI company remains one of the largest consumers of advanced computing capacity and has continued to spread its infrastructure spending across multiple chipmakers. For Nscale, the stakes are high. The company is seeking a public listing at a valuation of up to $35 billion, but it has faced questions about its ability to execute its plans. As of August, Nscale had roughly 25,000 advanced AI chips operational, far below its target of nearly 500,000 deployments. Its West Virginia site has also encountered local problems, including repeated runoff flooding that affected nearby homes, though the project received state certification in September. Separately, Microsoft recently withdrew from a planned Nscale site in England after grid power connections were delayed until the 2030s. The potential Nvidia guarantee also underscores pressure facing neocloud providers, which rent AI computing capacity but lack the deep cash reserves of large technology companies. Shares of CoreWeave, Nebius and IREN each fell more than 30% in October amid investor concerns over funding and execution. Nvidia has become a central financial backer of the broader AI infrastructure ecosystem, having 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. The discussions also come as Anthropic confronts financing questions of its own. The company recently filed for a public listing, but Blackstone has warned investors that Anthropic may receive a below-investment-grade credit rating after its IPO. Such a rating could raise borrowing costs and reinforce the company’s reliance on stronger partners to support the enormous capital demands of its growth strategy.