Nscale's West Virginia campus: erosion failures, local pushback and Nvidia credit talks

Nvidia is in talks to give Nscale billions of dollars in credit guarantees to back debt for a West Virginia data center earmarked for Anthropic, The Information reported on Thursday, citing people with knowledge of the talks. The same campus is already drawing state enforcement over pollution and erosion control failures, just as Nscale chases a $35 billion IPO.

Stack those two stories side by side and you get the most gilded cliffhanger of the fall.

The credit line, and what is not signed

According to the report, as relayed by Reuters, the credit support would help fund power infrastructure and construction at Nscale's data center in West Virginia, which Anthropic plans to use. Nvidia is already an investor in the UK-based cloud provider, so this would be a backer extending its own balance sheet to a company it owns a piece of.

The deal has not been signed, and the report says terms could still change. Nvidia, Nscale and Anthropic did not immediately respond to Reuters requests for comment.

The timing matters. Reuters notes the report lands as Coreweave and Firmus, both backed by Nvidia, have been hit by concerns about the debt financing behind the AI build-out. Debt is the oxygen of this industry right now, and everyone in the room is checking the gauge.

The numbers on the table

The figures are enormous, so let me give them room:

• $35 billion: the size of the IPO Nscale is pursuing. The FT calls the AI mega-project behind it "make-or-break."
• $45 billion: what Anthropic agreed in August to spend renting computing power from Nscale's West Virginia campus.
• About 460 megawatts: the AI computing power Nscale is reportedly in talks to sell Anthropic in a second deal, which could also be worth about $45 billion.

That is potentially $90 billion of Anthropic commitments across two contracts, one signed and one still in negotiation. The proposed credit guarantees would help finance the power infrastructure and construction needed to deliver that computing capacity. A customer's promise is not, by itself, a finished data center.

Meanwhile, in Mason County

The campus sits in Mason County, where Nscale and Starwood Digital Ventures, an investment platform of Miami Beach-based Starwood Capital Group, are developing two data center projects. Governor Patrick Morrisey, one of the state's most vocal supporters of data center growth, announced them as state-certified in September.

The ribbon-cutting energy has met some weather. Documents recently filed with the West Virginia Department of Environmental Protection forecast significant environmental impacts from the two projects. Construction at one of the sites has already resulted in substantial pollution and erosion control failures, adding to a groundswell of data center opposition in West Virginia and nationwide.

The DEP issued a unilateral enforcement order to Monarch, the Nscale affiliate behind the campus. According to the agency's statement, inspectors investigated after heavy rainfall and determined the site's controls were overwhelmed, allowing sediment-laden water to leave the site. The reporting gives no fine amount or list of required fixes.

There is also a power question. Monarch Cloud Campus LLC applied on April 20 for an air quality permit to build an off-grid electric generation facility at 30 Monarch Way, just north of Point Pleasant. On September 28, DEP engineer Edward Andrews issued a preliminary determination that the facility would meet draft permit limits and comply with state and federal air quality rules. That is a preliminary approval, not a final one.

What it means

Here is my read: the campus has to be built, powered, permitted and financed, and each step has a different audience. Anthropic wants the computing power. Lenders want comfort. Regulators want clean water. Neighbors want to be heard. Nvidia's guarantee, if it happens, speaks mainly to the lenders.

It would also be a vote of confidence from an existing investor. Whether lenders hear it that way, given the nervousness around Coreweave and Firmus debt, is the open question.

What to watch

• The guarantee itself: whether Nvidia and Nscale sign, and on what terms. The report says they can still change.
• The second Anthropic deal: whether the roughly 460-megawatt agreement is finalized.
• The DEP: what corrective actions and penalties follow the enforcement order, and whether the air permit clears from preliminary to final.
• The IPO: the reporting gives no timeline, underwriters or exchange for the $35 billion offering.

Big money, big power and a very wet construction site. Everything is historic. Especially today.