Nvidia may cosign billions in loans for an Anthropic data center

Nvidia, the company that makes the chips behind most AI, is in talks to back billions of dollars in loans for a data center in West Virginia. The Information reported it, and Bloomberg later corroborated the report. The site is being built by Nscale for Anthropic, the maker of the Claude AI assistant. In plain terms, the chip seller would be cosigning its customer's loans.

What Nvidia would do

The deal is called a residual value guarantee. If Nscale failed to make construction payments, Nvidia would step in, temporarily take over the facility, and help find a buyer and a new tenant. The money would help pay for electricity and construction at the campus. Until now, Nvidia's support for cloud providers has mostly covered leases and chip purchases, not construction.

The size of the bet

Anthropic has signed a $44.6 billion contract for the first building alone, according to Nscale's IPO filing. That building is 460 megawatts and is expected to use Nvidia's next-generation Vera Rubin chips. The companies are also discussing a second deal worth roughly $45 billion for another building. Nvidia has already put about $170 billion into AI cloud firms and big customers, including $1 billion in convertible financing for Nscale in September.

Why investors are nervous

Nscale is a neocloud, a company that rents out AI computing power without a cash-rich core business behind it. Investors have been souring on the group. CNBC reported that shares of CoreWeave, Nebius and IREN had each fallen more than 30% in October as of last week. When a supplier has to vouch for a customer's debt, it suggests lenders want extra comfort before they put up money.

Nscale has its own problems:

• It had about 25,000 advanced AI chips running in August, against a plan for nearly 500,000.
• Runoff from the West Virginia construction site has flooded nearby homes more than once.
• Microsoft pulled out of a planned Nscale site in England after grid power was pushed into the 2030s.
• It is seeking to go public at a valuation of up to $35 billion.

Anthropic's finances

Anthropic also filed to go public this week. Blackstone has warned investors that it may receive a below-investment-grade credit rating after its IPO. A so-called junk rating would raise its borrowing costs and could push it to keep leaning on stronger partners to back its debt. One investor told The Information that Anthropic's involvement likely explains why Nvidia wants the project to stay on track.

What is not known yet

These are talks, not a finished deal. The reports do not give the exact amount Nvidia would guarantee or the final terms. It is also unclear whether Nscale's IPO and the second building will go ahead as planned.