Nvidia considers financial backing for Nscale’s west virginia AI data center

Nvidia is reportedly in discussions to provide a residual value guarantee for Nscale’s planned Anthropic data center in West Virginia, according to The Information. This would involve guaranteeing billions in debt financing for the project, which includes a $44.6 billion contract for the first 460-megawatt building. The arrangement would help Nscale secure funding for construction and electricity costs, with Nvidia stepping in if the company defaults. Anthropic, a major AI computing power buyer, is also considering a second deal worth around $45 billion for another building at the campus. Nscale, seeking a $35 billion valuation, has faced challenges, including delays and environmental issues at its West Virginia site. Microsoft recently withdrew from a planned Nscale site in England due to power grid delays. Nvidia has invested approximately $170 billion in the neocloud sector, including $1 billion in convertible financing to Nscale in September. Investors are concerned about the financial viability of neoclouds, with shares of CoreWeave, Nebius, and IREN dropping over 30% in October. Anthropic, which filed for an IPO, faces potential credit rating challenges, which could increase its borrowing costs and reliance on partners like Nvidia.