Nvidia is negotiating to provide a debt guarantee worth billions of dollars to Nscale, a British artificial intelligence cloud infrastructure firm, to finance construction of a data centre in West Virginia that Anthropic intends to lease. Phoebe Liu reported the negotiations for The Information on Thursday, 29 October, though the arrangement has not yet been finalized and its conditions remain subject to change.
The guarantee would apply to a residual value arrangement covering the 460MW facility itself, according to The Information. Under this structure, Nvidia would assume responsibility if Nscale encountered difficulties meeting its construction obligations, potentially taking temporary control of the site to identify a replacement buyer and tenant. This approach differs from other guarantees Nvidia has extended to competing AI cloud operators. One investor suggested that Anthropic's involvement likely motivates Nvidia's commitment to ensuring the project advances.
Brody Ford corroborated the discussions with Bloomberg, citing sources with knowledge of the matter. The backing would assist in covering both electricity and construction expenses for the campus. Nscale declined comment to Bloomberg, while Nvidia offered no response. Nvidia maintains an existing investment position in Nscale.
Anthropic's exit clause
In August, Anthropic committed to a $45bn arrangement to purchase computing capacity from the initial phase of the campus. This contract represents over 40% of Nscale's $103bn revenue backlog, according to the Financial Times. The organizations are also exploring a second $45bn agreement for an additional facility.
Nscale disclosed in its IPO documentation that it has not yet obtained financing to construct or outfit the initial building, the FT reported. The arrangement permits Anthropic to exit if the necessary funding does not materialize by a specified date.
Tighter conditions and postponed public offering
Following market deterioration, Nvidia and other prospective supporters have begun imposing more demanding conditions, according to the Wall Street Journal, which cited informed sources. This shift has pushed back Nscale's revised IPO prospectus.
Nscale is now targeting a December debut rather than November, the WSJ reported. Certain advisors have cautioned that the offering may fall short of the $30bn to $35bn valuation target the company had sought, reflecting earlier resistance from investors.
Infrastructure-focused cloud firms including CoreWeave, Nebius and Nscale have faced effective exclusion from debt markets in recent weeks, the WSJ noted. Elon Musk remarked last week that debt financing had become unavailable to these enterprises.
Complications at the West Virginia site
The facility, which Nscale designates as the Monarch Compute Campus, has encountered structural difficulties, community resistance and regulatory examination, according to FT records. In September, state authorities halted work for three days after site drainage caused flooding in adjacent residential areas. Nscale has received 10 violation notices relating to stormwater management deficiencies.
An individual with direct knowledge of Nscale attributed the September incident to severe weather conditions. The company stated it complied with all directives and has remedied the resulting harm. The initial 2GW phase will derive power from 864 gas-fired generators.
Nscale recorded a net loss of $1bn against revenue of $141mn during the first six months of 2026, the FT reported. Microsoft terminated its participation in a planned UK facility this month. Chief executive Josh Payne communicated to employees in a recent memo that customer appetite for Nscale offerings remained exceptionally strong.
When asked this month about Nscale's difficulties bringing data centres into operation, Nvidia chief executive Jensen Huang advised the organization to "work around the clock".
Try less sleep, which is what I do.
Jensen Huang, Nvidia chief executive, to the Financial Times
Source: The Next Web
