Nvidia Weighs Backing Nscale AI Data Center in West Virginia

Nvidia is in talks to guarantee billions of dollars in debt financing for AI cloud provider Nscale's planned data center in West Virginia, according to reports from The Information and Bloomberg. The facility's first building is already tied to a $44.6 billion contract with Anthropic, Nscale's IPO filing shows.

Under the proposed structure, known as a residual value guarantee, Nvidia would step in if Nscale defaulted on construction payments, temporarily take over the facility and help find a buyer and a new tenant, The Information reported. It would be the first time Nvidia's support for a cloud provider extends to construction costs, rather than leases and chip purchases.

The arrangement is meant to help Nscale secure financing for electricity and construction at the campus, a sign of how hard the AI industry is working to keep its buildout plans moving as investors grow nervous about the sums involved. Nvidia has already committed $1 billion in convertible financing to Nscale in September and has extended roughly $170 billion in investments and credit support to neoclouds and large customers, according to The Information.

Anthropic's contract covers the first 460-megawatt building at the site, which is expected to run on Nvidia's next-generation Vera Rubin chips. The two companies are also discussing a second deal worth about $45 billion for another building.

Nscale is seeking to go public at a valuation of up to $35 billion, despite doubts about its ability to deliver on ambitious projects. The company had about 25,000 advanced AI chips running in August, a fraction of the nearly 500,000 it plans to deploy.

The West Virginia campus has run into trouble of its own: 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.