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Nvidia weighs playing the cosigner for Nscale’s AI data center in West Virginia

AI2 min read

Nvidia is in talks to back billions of dollars in loans for Nscale's planned AI data center in West Virginia, which will serve Anthropic. This would mean Nvidia helps guarantee a customer's debt.

What happened

Nvidia is talking about guaranteeing billions of dollars in debt for Nscale, a company that rents out AI computing power. The money would pay for the electricity and building costs of a huge data center in West Virginia. Anthropic, an AI company, is the planned customer. If Nscale could not make its construction payments, Nvidia would step in, take over the building for a while, and look for a new buyer or tenant.

Key numbers

  • Anthropic signed a $44.6 billion contract for the first building alone.
  • The first building uses 460 megawatts of power and is expected to run Nvidia's next-generation Vera Rubin chips.
  • A second deal worth roughly $45 billion for another building is being discussed.
  • Nscale had about 25,000 advanced AI chips running in August, out of nearly 500,000 it plans to deploy.
  • Nscale wants to go public at a valuation of up to $35 billion.

Background

Neoclouds are cloud companies that rent out AI computing power but do not have a large, cash-rich main business behind them. Nvidia has mostly helped them with leases and chip purchases. Backing a construction loan would be a new and bigger step. Nscale's West Virginia site has also had problems, including runoff from construction that flooded nearby homes more than once. Microsoft pulled out of a planned Nscale site in England this month after power for it was delayed into the 2030s.

Why it matters

The deal shows how hard the AI industry is working to keep its huge building plans going while investors grow nervous about the money involved. It would tie Nvidia even more closely to Nscale and help secure a major buyer for its chips. Anthropic also faces questions about how it will pay for its own growth, and a low credit rating could make its borrowing more expensive.

What to watch

  • Whether Nvidia and Nscale reach a final guarantee deal.
  • Whether the second, roughly $45 billion building deal goes forward.
  • Whether Nscale's stock market listing happens at its target valuation.
  • Whether Anthropic receives a below-investment-grade (junk) credit rating after its IPO.

Glossary

Nvidia
A chipmaker that makes the powerful chips used to train and run AI.
Nscale
An AI cloud company that rents out AI computing power and is building large data centers.
Anthropic
An AI company and one of the largest buyers of AI computing power.
Vera Rubin
Nvidia's next-generation AI chips, expected to power the first Nscale building.

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