Nvidia weighs playing the cosigner for Nscale’s AI data center in West Virginia
techcrunch ·
Nvidia is reportedly negotiating to guarantee billions in debt financing for Nscale’s planned AI data center in West Virginia, a move that would see the chipmaker co-signing loans for the project. This arrangement, known as a residual value guarantee, would allow Nvidia to step in if Nscale defaults on construction payments, temporarily take over the facility, and assist in finding new tenants. The deal supports Anthropic, which has signed a $44.6 billion contract for the first building at the campus, expected to utilize Nvidia’s next-generation Vera Rubin chips. Nscale faces significant challenges, including delays in deploying its target number of advanced AI chips and local environmental issues such as construction runoff flooding nearby homes. The financial backing comes as investor sentiment toward neocloud providers grows jittery, evidenced by recent stock declines for companies like CoreWeave and Nebius. Nvidia has previously extended approximately $170 billion in investments and credit support to the sector, aiming to secure major customers for its hardware while mitigating risks associated with ambitious buildout plans. Meanwhile, Anthropic itself is navigating potential credit rating issues following its IPO filing, which may necessitate continued reliance on stronger partners for debt financing.
techcrunch