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

The structure at play is a residual value guarantee: if Nscale defaulted on construction payments, Nvidia would temporarily take over the facility, then help line up a buyer and a new tenant. That money would go toward electricity and construction costs for the West Virginia campus. The move would mark an expansion of Nvidia's playbook, which until now has focused on supporting cloud providers through lease and chip purchase commitments rather than construction.

The deal's scale is significant for both sides. Anthropic has signed a $44.6 billion contract covering just the first building of Nscale's West Virginia campus, per Nscale's IPO filing, and the two sides are discussing a second agreement worth roughly $45 billion. That first building is expected to house 460 megawatts and run Nvidia's next-generation Vera Rubin chips. For Nscale, which is seeking to go public at a valuation of up to $35 billion, the financing matters: the company had about 25,000 advanced AI chips running in August, far short of the nearly 500,000 it aims to deploy.

Nscale's execution record has been uneven. Its West Virginia campus flooded nearby homes with construction runoff on more than one occasion before winning state certification in September following months of negotiation. Earlier this month, Microsoft abandoned a planned Nscale site in England after grid power for it was pushed into the 2030s. Meanwhile, Nvidia has already extended roughly $170 billion in investments and credit support to neoclouds and large customers, including $1 billion in convertible financing committed to Nscale in September.

That generosity comes as investor patience thins. Shares of CoreWeave, Nebius, and IREN had each fallen more than 30% in October as of last week, CNBC reported, as neoclouds renting AI compute without a cash-rich core business face renewed scrutiny. Nvidia's proposed guarantee deepens its financial entanglement with Nscale while securing demand for its chips; one investor told The Information that Anthropic's involvement likely explains Nvidia's interest in keeping the project on track, given that Anthropic has spread infrastructure spending across multiple chipmakers.

What remains open: whether the guarantee is finalized and on what terms, whether a second Anthropic building agreement materializes, and how much construction exposure Nvidia is willing to absorb before its balance sheet becomes the sector's backstop of last resort.