Nvidia is negotiating a residual value guarantee to backstop billions in debt financing for Nscale's planned AI data center in West Virginia, according to reports from The Information and Bloomberg. Under the arrangement, Nvidia would co-sign Nscale's construction and electricity loans, stepping in to temporarily operate the facility and find a buyer or new tenant if Nscale defaults.
Anthropic has signed a $44.6 billion contract for the first building at the West Virginia campus, which is expected to house Nvidia's next-generation Vera Rubin chips. The companies are also discussing a second deal worth roughly $45 billion for another building. Nscale is seeking to go public at a valuation of up to $35 billion.
The guarantee marks a departure for Nvidia's support of cloud providers, which has historically covered leases and chip purchases, not construction financing. Nvidia has extended roughly $170 billion in investments and credit support to neoclouds and large customers, including $1 billion in convertible financing to Nscale in September.
Nscale has faced execution challenges. The company had about 25,000 advanced AI chips running in August, a fraction of the nearly 500,000 it plans to deploy. Its West Virginia campus flooded nearby homes more than once from construction runoff and won state certification in September after months of negotiations. Microsoft pulled out of a planned Nscale site in England this month after grid power was pushed into the 2030s.
One investor told The Information that Anthropic's involvement likely explains Nvidia's interest in keeping Nscale operational. Anthropic spreads its infrastructure spending across multiple chipmakers and filed to go public this week, but Blackstone warned investors it may receive a below-investment-grade credit rating after its IPO.
Neoclouds face investor pressure. Shares of CoreWeave, Nebius, and IREN fell more than 30% in October, according to CNBC.