Nscale, Anthropic in Talks for $45 Billion Cloud Computing Deal

(Bloomberg) -- Nscale Ltd., a company that provides cloud computing power for artificial intelligence (AI), is in talks to sell computing power to Anthropic PBC (ANTH.PVT) in a deal that could be worth about $45 billion, according to people who know about the talks.

The Nvidia Corp.-backed company that develops data centers is seeking a second major deal with the company behind Claude. The deal would cover a second building at Nscale's Monarch data center campus in West Virginia, the people said. According to a filing for Nscale's planned initial public offering (IPO), Anthropic already has agreements with Nscale for computing infrastructure worth up to about $44.6 billion.

The second building at Monarch would provide 460 megawatts of computing power using Nvidia's advanced Vera Rubin AI chips, some of the people said. Anthropic also has the first chance to agree to a deal for the expected third building at Monarch, they said.

The deal could be finalized within the next few days, the people said. They asked not to be named because the talks are private. Discussions are still underway, the plan's details could change, and no final decisions have been made, they said. Representatives for Anthropic and Nscale declined to comment.

A second deal worth billions of dollars would improve Nscale's chances of success in its planned IPO. The company is seeking a valuation of about $30 billion when it goes public. Bloomberg News has reported that a group of investors urged Nscale to lower its target valuation for the IPO.

Anthropic, one of Nscale's biggest customers, has also become a major customer for data center providers more broadly. Its deals include a $50 billion agreement with Fluidstack Ltd., a $10 billion agreement with infrastructure startup Volta Infrastructure Holdings Ltd., and a $45 billion agreement with Elon Musk's SpaceX.

Documents filed for Nscale's planned IPO show that the Monarch campus in West Virginia could eventually support more than 8 gigawatts of total power capacity.

Microsoft Corp. was first expected to lease part of the Monarch campus. In March, Microsoft announced that it had signed a letter of intent for the planned data center. But Microsoft withdrew from the West Virginia site during the summer, allowing Anthropic to become the tenant, Bloomberg News reported.

Anthropic was valued at $965 billion in May. It is expected to hold its own IPO in the coming months, which could set a record. The company is continuing to look for more computing power so it can keep growing.

Investors have become more concerned about the huge amounts of money being borrowed to pay for the rapid growth of AI data centers. This has hurt confidence in a range of investments, from chipmakers' stocks to debt issued by cloud computing companies.

Nscale filed public paperwork for a US stock market listing in September. It has not yet begun formally promoting the IPO to investors, even though the required 15-day waiting period has passed. People familiar with the matter have said the company is responding to comments from the US Securities and Exchange Commission about its filing. Nscale plans to begin promoting the IPO once those issues are resolved.

Last month, Nscale raised $3.36 billion in funding before its IPO. The funding round was led by Dan Loeb's Third Point. Other investors included Nvidia, Apollo Global Management Inc., Citadel, Hudson Bay Capital and Abu Dhabi Investment Council.