Nvidia Plans to Provide Debt Guarantee for Nscale's Anthropic Data Center Project

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People familiar with the matter revealed that Nvidia is in talks to provide billions of dollars in debt credit guarantees to emerging AI cloud service provider Nscale, for the construction of a 460-megawatt data center, which will be used by Anthropic.

The deal has not yet been signed, and the terms may still change. But the matter once again reflects that Nvidia continues to provide financial support to emerging cloud vendors such as Nscale, CoreWeave, and Firmus. These vendors have already taken on debt and still need to raise more funds to build AI-dedicated data centers, and are therefore under pressure from investors.

People familiar with the matter revealed that Nvidia is in talks to provide billions of dollars in debt credit guarantees to emerging AI cloud service provider Nscale, for the construction of a 460-megawatt data center, which will be used by Anthropic.

The deal has not yet been signed, and the terms may still change. But the matter once again reflects that Nvidia continues to provide financial support to emerging cloud vendors such as Nscale, CoreWeave, and Firmus. These vendors have already taken on debt and still need to raise more funds to build AI-dedicated data centers, and are therefore under pressure from investors.

Nvidia has provided about $170 billion in financial support to these emerging cloud vendors and other major customers through credit support and investments. In addition, according to media reports last week, Nvidia is in talks to invest hundreds of millions of dollars in Australian AI cloud service provider Firmus, which abruptly withdrew its initial public offering plan earlier this month.

For the credit funds for Nscale's West Virginia campus, the money will be used for the data center's power infrastructure and civil construction. This differs from other larger credit agreements, which generally cover customers' data center leases or chip procurement financing.

Nscale disclosed in its IPO prospectus last month that it signed a $45 billion contract with Anthropic to lease the first 460-megawatt building at its Monarch data center campus in West Virginia, and the building will be fully equipped with Nvidia's latest Vera Rubin graphics processors. Industry estimates show that building the civil framework for a data center with 1 gigawatt of power capacity requires $12 billion; based on this, the scale of Nvidia's credit support this time is likely to exceed $5 billion. (The Information previously reported that related construction costs are still continuing to rise.)

A person familiar with the matter said that the agreement takes the form of a residual value guarantee for the data center asset itself, rather than for the lease or chips. This arrangement can allow Nscale to obtain investment-grade financing for the project construction. The person said that if Nscale cannot pay the construction funds on time, Nvidia will pay on its behalf, temporarily take over the facility, and at the same time help arrange for the site to be resold and re-leased.

Another person familiar with the matter revealed that Anthropic also plans to sign for the second phase of the West Virginia campus, with a contract scale roughly equivalent. Media first reported the relevant talks.

An investor in the field speculated that Nvidia wants to ensure Nscale operates smoothly because this startup is deeply tied to Anthropic, and Anthropic is one of the major buyers of AI server chips. Unlike most peers, Anthropic adopts a multi-vendor procurement strategy and does not rely solely on Nvidia.

Many emerging cloud vendors, including Nscale, have not yet been validated by the market and need to achieve substantial revenue growth to be able to repay loans—they mainly borrow money to purchase Nvidia servers. As interest rates rise, this has become a difficult problem.

Emerging cloud vendors are crucial to Nvidia because Nvidia's top customers, namely Google, Microsoft, and Amazon, are all developing their own server chips to reduce their dependence on Nvidia. This summer, Nvidia even adjusted its revenue reporting methodology to further highlight the emerging cloud vendor business. Nvidia began vigorously supporting such vendors after GPU demand surged in 2023.

Whether Nvidia can continue to support this ecosystem will determine the survival of some emerging cloud vendors and may also drive industry consolidation; many industry executives believe consolidation is the general trend.

Nvidia is actively working to prove its doubters wrong, including through additional equity investments, guaranteed chip allocations, credit support, and directing customers. Executives at Nvidia and emerging cloud vendors revealed that an internal Nvidia team co-led by Jensen Huang's son-in-law Nico Caprez has even begun helping emerging cloud vendors find land parcels with surplus power. Such land parcels are very scarce, and whether building independent power sources or connecting to the grid, both require long cycles. news_keyword_pub,usstock,MSFT&GOOG&AMZN iframe below main text iframe below main text General statement General statement QR code at end start QR code at end start

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