Nscale and Anthropic in talks for $45 billion computing deal
Nscale is in talks to provide Anthropic with $45 billion worth of computing power for AI, according to reports. The proposed deal would expand their existing partnership and support Nscale's effort to reach a $30 billion valuation ahead of its planned IPO, when a company first sells shares to the public.
The proposed deal centers on a second building at Nscale's Monarch data center campus in West Virginia. Reuters reported, citing people familiar with the matter, that the building would provide 460 megawatts of computing capacity and use Nvidia's next-generation Vera Rubin chips.
The possible agreement is also expected to give Anthropic the first chance to agree to a deal for a third building planned for the campus before other potential buyers can do so.
Second $45 billion deal in two months
Anthropic has spent the past year securing large computing contracts. The company is betting that its major investments in AI infrastructure will eventually pay off, TechCrunch reported. The latest talks would build on a $45 billion commitment the company made in August to rent cloud computing capacity at Nscale's Monarch campus in West Virginia.
The deals show how quickly Nscale is growing as it expands to meet demand for AI computing. Reuters reported that the total value of the company's contracts has risen from $100 million to more than $103 billion in two and a half years. This puts Nscale in competition with infrastructure providers Nebius, Crusoe and Lambda. Nvidia has backed Nscale.
According to Yahoo Finance, Nscale's planned IPO filing also lists infrastructure agreements with Anthropic worth up to $44.6 billion.
Investors nervous about AI debt
Investors are paying closer attention to AI company valuations and infrastructure spending as companies promise to spend billions on computing capacity. Reuters reported that some investors are urging Anthropic to lower its target IPO valuation after a series of setbacks across the AI industry.
CoreWeave's shares fell sharply last week because of concerns about its $50 billion debt. Its troubles also contributed to a wider sell-off in AI stocks.
Nscale faces similar questions about how it will pay for its rapid growth. The money listed in its contracts is revenue it expects to earn in the future, not cash it already has. Building more data centers and securing enough electricity to run them also require large investments upfront.
Nscale has faced problems securing major customers. Reuters reported that Microsoft abandoned plans to make one of Nscale's major data centers a key site for its operations after delays in connecting it to the power supply pushed the expected delivery date into the 2030s. However, Nscale's prospectus still names Microsoft and Anthropic as expected major customers.
Both companies have a lot at stake as they prepare to go public. Anthropic is aiming to launch its IPO later this year.