Nvidia is in talks to guarantee billions of dollars in debt financing for Nscale’s planned data center campus in West Virginia, a site built for Anthropic, The Information reported Thursday, with Bloomberg later corroborating the report. If it goes ahead, the deal would put the world’s most valuable chipmaker in the unusual position of cosigning a customer’s construction loans.
Anthropic has already signed a $44.6 billion contract for the campus’s first building alone, according to Nscale’s IPO filing. That building is planned at 460 megawatts and is expected to run on Nvidia’s next-generation Vera Rubin chips, while the companies are also discussing a second deal worth roughly $45 billion for another building.
Nothing is signed yet.
How the Nvidia Nscale data center guarantee would work
The structure under discussion is known as 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 a new tenant, according to The Information. The arrangement would help Nscale secure financing for the electricity and construction costs of its West Virginia campus.
That is a step beyond what Nvidia has done before. Its earlier support for cloud providers has mostly covered leases and chip purchases, not construction. Don’t mistake this for a chip sale with generous terms. A guarantee like this puts Nvidia’s balance sheet behind a building it doesn’t own, for a tenant it doesn’t control, and the exposure lasts until the debt is repaid or refinanced.
Nscale is a London-based AI cloud firm founded in 2024, and it is seeking to go public at a valuation of up to $35 billion. That ambition sits awkwardly next to its current scale. The company had about 25,000 advanced AI chips running in August, a fraction of the nearly 500,000 it plans to deploy, according to reporting that cited the Financial Times.
Why Nscale needs a cosigner
Nscale’s West Virginia campus, known as Monarch, has had a rough start. Runoff from the construction site has flooded nearby homes more than once, and the project only won state certification in September after months of negotiations. This month, Microsoft pulled out of a planned Nscale site in England after grid power for it was pushed into the 2030s.
Investors have grown jittery about the whole AI buildout, and the numbers explain why. Neoclouds, which rent out AI computing power without a cash-rich core business behind them, have come under pressure. Shares of CoreWeave, Nebius, and IREN had each fallen more than 30% in October as of last week, CNBC reported.
Nvidia, meanwhile, has already put a lot of money behind this ecosystem. The Information puts its investments and credit support to neoclouds and large customers at roughly $170 billion, including $1 billion in convertible financing committed to Nscale in September. A guarantee for the West Virginia site would add construction risk to a tab that has so far been mostly chips, leases, and equity-style bets.
Anthropic’s own position adds to the pressure. The company filed to go public this week, but Blackstone has warned investors that Anthropic may receive a below-investment-grade credit rating after its IPO. A junk rating would raise Anthropic’s borrowing costs and could push it to keep relying on stronger partners to back its debt. One investor told The Information that Anthropic’s involvement likely explains Nvidia’s interest in keeping Nscale’s project on track, but that is one investor’s reading, not a stated Nvidia position.
Why this matters
Step back from the deal terms and the shape of the AI boom looks different. For two years, the story was simple: Nvidia sold the picks and shovels, and everyone else took the construction risk. A residual value guarantee flips part of that story. If the buildout slows, Nvidia’s problem would not just be fewer chip orders. It would be a half-built data center it has to find a buyer for.
That’s also why the deal, if signed, would be a vote of confidence that markets can’t ignore. Nvidia knows Nscale’s books better than most outsiders, since it is already an investor and the site’s chips will be its own Vera Rubin hardware. A guarantee says Nvidia believes the campus gets finished and filled. Walking away would say the opposite, and lenders would hear that too.
What to watch now is narrow and concrete. Does a guarantee get signed, and on what terms? Does Nscale’s IPO proceed at anything near a $35 billion valuation? And does Anthropic’s second, roughly $45 billion building move from discussion to contract? Those three answers will tell you more about the AI infrastructure boom than another quarter of chip sales.
Frequently asked questions
What is Nvidia discussing with Nscale?
Nvidia is in talks to guarantee billions in debt financing for Nscale’s West Virginia data center campus, which is planned for Anthropic. The talks were reported by The Information and corroborated by Bloomberg, and no deal has been signed.
What is a residual value guarantee?
It is a deal structure in which Nvidia would step in if Nscale defaulted on construction payments, temporarily take over the facility, and help find a buyer and a new tenant. It covers the site’s construction and power costs, not just chip purchases.
How big is Anthropic’s deal with Nscale?
Anthropic has signed a $44.6 billion contract for the campus’s first building alone, according to Nscale’s IPO filing. That 460-megawatt building is expected to use Nvidia’s Vera Rubin chips, and a second deal worth roughly $45 billion is under discussion.
Why would Nvidia cosign a customer’s loans?
It would deepen Nvidia’s ties to Nscale while locking in a major customer for its chips. One investor told The Information that Anthropic’s involvement likely explains Nvidia’s interest, though Nvidia has not stated its reasons publicly.
Sources: TechCrunch, Bloomberg, The Information