Nvidia is reportedly in talks to guarantee billions of dollars in debt financing for AI cloud provider Nscale’s planned data center in West Virginia, which will provide computing infrastructure for Anthropic. The proposed arrangement would help finance construction and electricity infrastructure for a project backed by a $44.6 billion contract with the AI developer.
According to The Information, the discussions involve a potential credit guarantee that would allow Nscale to secure financing for its data center construction. The agreement has not been signed, and its terms could still change.
Nvidia Could Guarantee Construction Financing for Nscale
Under the proposed arrangement, Nvidia would provide a residual value guarantee covering the data center facility. If Nscale failed to meet its construction payments, Nvidia would temporarily take control of the facility and help arrange its sale or lease to another customer.
The guarantee would extend Nvidia’s financial support beyond its previous arrangements with cloud providers, which have primarily involved equipment purchases and leases. The company has already committed $1 billion in convertible financing to Nscale as part of a September investment agreement.
Nscale is preparing for an initial public offering that could value the company at up to $35 billion. According to its IPO filing, Anthropic’s existing contract covers computing services worth up to $44.6 billion at its West Virginia campus, using Nvidia’s next-generation Vera Rubin chips.
Anthropic Discusses Another $45 Billion Computing Agreement
The existing contract involves a 460-megawatt data center building, while Nscale and Anthropic are reportedly discussing another agreement worth approximately $45 billion for additional computing capacity. The projects would support Anthropic’s growing demand for AI infrastructure.
However, Nscale has faced difficulties expanding its operations. The company had approximately 25,000 advanced AI chips operating in August, compared with its planned deployment of nearly 500,000.
Its West Virginia construction site has also experienced repeated flooding incidents affecting nearby homes, although the project received state certification in September. Separately, Microsoft withdrew from a planned Nscale data center project in England after electricity availability was delayed until the 2030s.
AI Cloud Providers Face Financing Pressures
Nvidia has reportedly committed approximately $170 billion through investments and credit support to AI cloud providers and major customers. These include companies that rent computing infrastructure to AI developers but depend heavily on external financing.
Investor concerns have affected several publicly traded AI cloud providers, with CoreWeave, Nebius, and IREN each losing more than 30% of their share value during October, according to CNBC.
Anthropic has also faced questions about financing its infrastructure expansion following its recent IPO filing. Blackstone reportedly warned investors that the company could receive a below-investment-grade credit rating after going public, potentially increasing its borrowing costs and dependence on financing arrangements with larger technology partners.
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