Nvidia reportedly in talks to guarantee Nscale debt for Anthropic data center
The talks center on a guarantee for debt that Nscale, a UK AI cloud company, would raise to build a 460MW data center in Mason County, West Virginia. According to The Information, which first reported the talks on October 29, Nvidia would provide a residual value guarantee. Under that structure, Nvidia would step in if Nscale fell behind on construction payments, temporarily take over the facility, and help find a buyer or new tenant. The guarantee would cover the building itself rather than Nscale's lease or its chips. The deal is not signed and terms could change.
Anthropic agreed in August to pay roughly $45bn over six years to rent capacity at the Monarch campus, a figure Bloomberg first reported on August 26. Nscale's IPO filing puts the contract for the first building at $44.6bn, with capacity expected to come online from late 2027. The reports conflict on which building the guarantee supports. TNW ties it to the building Anthropic plans to use, while other accounts place it on a second 460MW phase at the same site. One account cites a package of about $5bn, but that conflicts with the talks-stage descriptions, so the size stays unconfirmed.
Nscale's own filings say Anthropic can walk away if financing for the first building misses a set deadline. Nvidia is already an investor in Nscale and committed $1bn in convertible financing in September.
Why it matters
For founders and operators, the deal shows compute capacity increasingly being financed through supplier balance sheets. A chipmaker absorbing construction risk can help a project get built sooner than one that relies on a thinly capitalized developer. The trade-off is that a lab's capacity becomes tied to the supplier's own exposure. Teams signing multi-year compute commitments should ask whether their supplier is carrying any counterparty risk, since that bears directly on pricing and delivery timing.
For investors, Nscale's valuation rests heavily on one tenant. The Anthropic contract reportedly represents more than 40% of Nscale's $103bn revenue backlog, and the company is seeking a listing at a valuation of up to $35bn. Lenders pricing Nscale's debt are effectively pricing Anthropic's ability to pay, and any prospectus update disclosing the guarantee's size and structure would show how much risk Nvidia is taking on.
Key points
- 1The Information reported on October 29 that Nvidia is in talks on billions in credit guarantees for Nscale.
- 2The structure is a residual value guarantee covering the 460MW building, not the lease or the chips.
- 3Anthropic agreed in August to pay about $45bn over six years for Monarch capacity.
- 4Anthropic can walk away if Nscale does not secure financing by a set deadline, per Nscale's IPO filings.
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