By Hamza Faisal
Nvidia is in talks to guarantee billions of dollars in debt financing for Nscale, the AI cloud provider building a data center in West Virginia for Anthropic, according to a report from The Information that Bloomberg later corroborated. In plain terms, the world's most valuable chipmaker would co-sign a customer's construction loans — a sign of how hard the industry is working to keep its buildout funded.
The arrangement would help Nscale borrow to pay for the electricity and construction costs of its West Virginia campus, known as Monarch. Anthropic has signed a contract worth about $44.6 billion to rent computing power from the campus's first building, according to Nscale's IPO filing, and the two companies are discussing a second deal of similar size. The first building, rated at 460 megawatts, is expected to run on Nvidia's Vera Rubin chips.
A guarantee unlike Nvidia's past support
The proposed guarantee would take an unusual form. Under what is known as a residual value guarantee, Nvidia would back the value of the data center building itself, helping Nscale raise investment-grade construction debt. If Nscale stopped making construction payments, Nvidia would step in, take over the facility, and help find a buyer and a new tenant, The Information reported.
That goes beyond Nvidia's earlier support for cloud providers, which has mostly covered leases and chip purchases rather than construction. The guarantee could exceed $5 billion, according to industry estimates cited in the reporting, based on the roughly $12 billion cost of building a data center shell with one gigawatt of power. Nothing has been signed and the terms could still change; Nscale declined to comment to Bloomberg, and Nvidia did not respond.
Why Nscale needs a backstop
The stakes for Nscale are high. The company is seeking to go public at a valuation of up to $35 billion, but its planned listing has slipped toward December, and its IPO filing acknowledged it had not yet secured the financing needed to build or equip the first West Virginia building. Anthropic can walk away from its contract if that financing is not in place by a set deadline, and the deal represents more than 40 percent of Nscale's $103 billion revenue backlog, the Financial Times reported.
Delivery has lagged ambition: Nscale had only about 25,000 advanced AI chips running in August, a fraction of the nearly 500,000 it plans to deploy.
A $170 billion web of support — and growing scrutiny
Nvidia is already deeply entangled in its customers' finances. The Information put its investments and credit support for neoclouds and large customers at roughly $170 billion, including $1 billion in convertible financing committed to Nscale in September. Neoclouds — firms that 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 percent in October as of last week, according to CNBC.
Anthropic's own financing questions add to the pressure. The company filed to go public this week, but Blackstone has warned investors it may receive a below-investment-grade credit rating after its IPO, which would raise its borrowing costs and push it to rely on stronger partners to back its debt. Nvidia chief executive Jensen Huang has pushed back hard on the idea that such arrangements amount to circular financing. But if this guarantee goes ahead, Nvidia would be Nscale's chip supplier, shareholder and debt backstop all at once — and investors are asking not whether the AI buildout can be funded, but who is ultimately on the hook if it cannot.
