Nvidia is in talks to guarantee billions of dollars in debt financing for Nscale's planned Anthropic data center in West Virginia, The Information reported Thursday. Bloomberg later corroborated the report. In essence, the chipmaker would be co-signing a customer's loans, a sign of how hard the AI industry is working to keep its buildout plans afloat as investors grow jittery about the amounts of money involved.
What is a residual value guarantee?
The arrangement would help Nscale secure financing for the electricity and construction costs of its West Virginia campus. Under what is known as a residual value guarantee, Nvidia would step in if Nscale defaulted on construction payments. It would temporarily take over the facility and help find a buyer and a new tenant. Nvidia's earlier support for cloud providers has mostly covered leases and chip purchases, not construction.
How much is Anthropic committing to the West Virginia data center?
Anthropic has signed a $44.6 billion contract for the project's first building alone, according to Nscale's initial public offering filing. That 460-megawatt building 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.
The stakes are high for Nscale. The company is seeking to go public at a valuation of up to $35 billion, despite growing concerns about its ability to deliver on ambitious data center projects. It has struggled to get those projects off the ground. In August, it had about 25,000 advanced AI chips running, a fraction of the nearly 500,000 it plans to deploy.
The West Virginia campus has run into trouble of its own. Runoff from the construction site has flooded nearby homes more than once. In September, after months of negotiations, the project won state certification. This month, Microsoft pulled out of a planned Nscale site in England after grid power for that site was pushed into the 2030s.
Nvidia has been a major financial backer of the sector, extending roughly $170 billion in investments and credit support to so-called neoclouds and large customers, according to The Information. That includes $1 billion in convertible financing committed to Nscale in September. Neoclouds rent out AI computing power without a cash-rich core business behind them, and they have come under pressure from investors. Shares of CoreWeave, Nebius and IREN had each fallen more than 30 percent in October as of last week, CNBC reported.
Why would Nvidia co-sign Nscale's debt?
The proposed guarantee would deepen Nvidia's financial ties to Nscale while helping secure a major customer for its chips. Anthropic, one of the largest buyers of AI computing power, has spread its infrastructure spending across multiple chipmakers. One investor told The Information that Anthropic's involvement likely explains Nvidia's interest in keeping the project on track.
The talks also come as Anthropic faces questions about how it will finance its own rapid expansion. The company filed to go public this week, but Blackstone has warned investors that Anthropic may receive a below-investment-grade credit rating after its IPO. A junk rating would raise Anthropic's borrowing costs and could push it to keep relying on stronger partners to back its debt.
Questo articolo è stato scritto con l'assistenza dell'IA.
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