Nvidia discusses debt guarantee for Nscale’s West Virginia project

Nvidia is discussing a guarantee for billions of dollars in Nscale debt to support a West Virginia data center intended for Anthropic, The Information reported on October 29. No agreement has been signed, and the proposed terms remain subject to change.

The proposed backing would cover the value of the 460MW building, according to The Information. If Nscale missed construction payments, Nvidia would temporarily take control of the property and help secure a purchaser and replacement tenant under a residual value guarantee.

Bloomberg separately confirmed the discussions, reporting that the support would help meet electricity and construction expenses. Nvidia already holds an investment in Nscale. Nscale declined Bloomberg’s request for comment, while Nvidia did not respond.

Anthropic agreed in August to a US$45 billion contract for computing capacity in the campus’s first building. That represents more than 40% of Nscale’s US$103 billion revenue backlog, the Financial Times reported. Discussions are also underway over another US$45 billion agreement covering a second building.

According to the Financial Times, Nscale disclosed in IPO filings that financing to construct and equip the first building was not yet secured. Anthropic has the right to withdraw if Nscale misses a financing deadline.

The Wall Street Journal reported that demands for tougher terms from Nvidia and other potential backers have held up Nscale’s revised IPO prospectus. Nscale now favors listing in December instead of November. Some bankers have cautioned that its targeted valuation of US$30 billion to US$35 billion is unlikely.

The Monarch Compute Campus has also faced construction difficulties and regulatory scrutiny, the Financial Times reported. State regulators halted work for three days in September after runoff flooded nearby homes. A person close to Nscale attributed the flooding to extreme weather and said the damage had been repaired.