Nvidia May Guarantee Loans for Anthropic Data Center Project

Staff Report | PNN

Chipmaker Nvidia is considering a new initiative to help secure large-scale financing for artificial intelligence infrastructure projects. The company is in discussions about providing several billion dollars in loan guarantees for a planned data center project by AI cloud company Nscale in West Virginia, United States. The Information first reported the development on Thursday, and Bloomberg later corroborated the report.

According to Nscale’s preliminary initial public offering (IPO) filing, the company has signed a $44.6 billion agreement with Anthropic to construct the project’s first building. Under the proposed arrangement, Nvidia would primarily act as a co-guarantor of Nscale’s debt. The development highlights the growing financial pressure involved in sustaining the massive infrastructure expansion planned by the AI industry.

The Information reported that the arrangement, known as a “residual value guarantee,” could allow Nvidia to step in if Nscale fails to meet its construction-related financial obligations. In such a situation, Nvidia could temporarily take responsibility for the facility and help find a new buyer or tenant.

The guarantee would make it easier for Nscale to secure financing for electricity and construction costs at its West Virginia campus. Previously, Nvidia’s support for cloud companies had mainly focused on leasing arrangements and chip purchases. Guarantees covering construction costs on this scale are relatively uncommon.

The project is particularly important for Nscale, which is preparing to go public at a valuation of up to $35 billion. However, concerns are growing among investors about the company's ability to deliver on large-scale data center projects.

The agreement with Anthropic covers the first 460-megawatt building at Nscale’s West Virginia campus. The facility is expected to use Nvidia’s next-generation Vera Rubin chips. The two companies are also discussing a second agreement worth approximately $45 billion for another building at the same campus.

However, Nscale has encountered several obstacles in advancing its projects. In August, the company had around 25,000 advanced AI chips in operation, far below its target of deploying approximately 500,000 chips. The West Virginia construction site has also faced allegations that rainwater runoff caused flooding in nearby homes. After several months of discussions, the project received state certification in September.

Meanwhile, Microsoft withdrew this month from a planned Nscale facility in England. The Financial Times reported that the decision was made after electricity supply from the national grid for the project was pushed back to the 2030s.

Nvidia has emerged as a major financial supporter of the AI infrastructure sector. According to The Information, the company has provided approximately $170 billion in investments and financial assistance, including loans, to neocloud providers and major customers. This includes a commitment made in September to provide Nscale with $1 billion in convertible financing.

Neocloud companies, which rent out AI computing capacity without having the revenue base of large established businesses, are also facing growing pressure from investors. According to CNBC, shares of CoreWeave, Nebius and IREN had fallen by more than 30 percent during October as of last week.

If discussions over a loan guarantee for Nscale move forward, the financial relationship between the company and Nvidia would deepen further. It would also create an opportunity for Nvidia to retain a major customer for its chips.

Anthropic, one of the largest buyers of AI computing capacity, is sourcing infrastructure from multiple chipmakers. An investor told The Information that Anthropic’s involvement could be one of the reasons Nvidia is interested in keeping Nscale’s project on track.

Questions have also emerged over how Anthropic will finance its own expansion. The company filed paperwork for an IPO this week. However, Blackstone has warned investors that Anthropic’s credit rating could remain below investment grade after the IPO.

Such a rating could increase the company’s borrowing costs and make it more dependent on financially strong partners to guarantee its loans.