Nvidia chief executive Jensen Huang at the Fortune Global Forum in San Francisco, 18 October 2022.
Nvidia is in talks to guarantee billions of dollars of debt for Nscale, the UK AI cloud company. The money would build a West Virginia data centre that Anthropic plans to use. Phoebe Liu first reported the talks for The Information on Thursday 29 October. The deal is not signed, and its terms could still change.
The guarantee would cover the value of the 460MW building itself, The Information reported. Under this kind of deal, called a residual value guarantee, Nvidia would step in if Nscale failed to make its construction payments. It would take over the site for a time and help find a buyer and a new tenant.
That is a different kind of backstop from the ones Nvidia has given other AI cloud companies, The Information reported. One investor told the outlet that Anthropic’s role likely explains Nvidia’s interest in keeping the project on track.
Brody Ford confirmed the talks for Bloomberg , citing a person familiar with the matter. The support would help cover the campus’s electricity and construction costs, he reported. Nscale declined to comment to Bloomberg, and Nvidia did not respond. Nvidia is already an investor in Nscale.
Anthropic signed a $45bn compute deal in August to rent computing power from the first building on the campus. The deal is more than 40% of Nscale’s $103bn revenue backlog, the Financial Times reported on Friday. The two companies are also in talks about a second $45bn deal for another building.
Nscale said in its IPO filings that it has not yet secured the money to build or equip the first building, the FT reported. Anthropic can walk away if that financing is not in place by a set deadline.
Nvidia and the other possible backers began demanding stricter terms after markets turned, the Wall Street Journal reported, citing people familiar with the matter. That has delayed Nscale’s revised IPO prospectus.
Nscale is now leaning towards a December listing rather than November, the WSJ reported. Some of its bankers have warned that an IPO is unlikely to reach the $30bn to $35bn valuation it had targeted. That follows earlier investor pushback .
AI cloud companies such as CoreWeave, Nebius and Nscale have effectively been shut out of the bond market in recent weeks, the WSJ reported. Elon Musk said last week that debt markets had shut out these companies.
Nscale calls the site the Monarch Compute Campus. Records reviewed by the FT show it has been hit by building problems, local opposition and regulatory scrutiny. In September, state regulators ordered construction to stop for three days after runoff from the site flooded neighbouring homes. Nscale has had 10 notices of violation for poor stormwater controls.
A person close to Nscale told the FT that extreme weather caused the September flooding. The company followed every order and has fixed the damage, the person said. The first 2GW phase of the campus will run on 864 gas-fired engines.
Nscale made a net loss of $1bn on revenue of $141mn in the first half of 2026, the FT reported. Microsoft pulled out of its planned UK site this month. Chief executive Josh Payne told staff in a memo last week that demand for Nscale’s services remained “insatiable”.
Asked this month about Nscale’s problems getting its data centres online, Nvidia chief executive Jensen Huang told the company to “work around the clock”.
“Try less sleep, which is what I do,” Huang added, the FT reported.
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