Report: Nscale in talks to sell $45 billion in compute capacity to Anthropic, potentially boosting IPO prospects

AI cloud computing company Nscale Ltd. is in talks to sell computing capacity to Anthropic PBC in a deal that could be worth about $45 billion, according to people familiar with the matter. The data center developer, backed by NVIDIA Corporation (NVDA.US), is seeking a second major agreement with Claude developer Anthropic involving a second facility at the Monarch data center campus in West Virginia, the people said. According to Nscale's IPO filing, Anthropic has already signed an infrastructure agreement with Nscale worth up to about $44.6 billion. Some of the people said the second Monarch building will provide 460 megawatts of computing capacity using NVIDIA Corporation's advanced Vera Rubin AI chips. They also said Anthropic holds a right of first refusal on the expected third building at Monarch, meaning it can lease it first on equivalent terms. The deal could be finalized as soon as the coming days, the people said. Talks are still ongoing, plan details may change, and no final decision has been made. Representatives for Anthropic and Nscale both declined to comment. IPO valuation expectations shift If completed, the deal would be another multibillion-dollar computing capacity agreement and could boost Nscale's IPO prospects. The company is seeking a valuation of about $30 billion in its listing. But people familiar with the matter said recently that a group of investors has urged the company to consider a valuation range of $16 billion to $19 billion, believing that range is more likely to appeal to buyers, with one important factor being the collapsed IPO plans of Australian AI data center company Firmus. Anthropic is one of Nscale's largest customers and has also become a major customer among data center providers. Its signed agreements include a $50 billion deal with Fluidstack Ltd., a $10 billion deal with infrastructure startup Volta Infrastructure Holdings Ltd., and a $45 billion deal with Elon Musk's SpaceX. The IPO filing shows that Nscale's Monarch campus in West Virginia could scale to more than 8 gigawatts of total power once fully built out. Part of the Monarch campus was initially expected to be leased by Microsoft Corporation. Microsoft Corporation announced in March that it had signed a letter of intent for the planned data center. But Microsoft Corporation reportedly withdrew from the West Virginia site in the summer, making Anthropic the tenant. Anthropic was valued at $965 billion in May and is expected to hold a blockbuster IPO in the coming months and continue seeking more computing capacity to sustain growth. Investors are increasingly wary of the huge sums borrowed to finance the AI data center boom. Sentiment toward related assets, from chipmaker stocks to cloud computing company debt, has cooled. Shares of several of Nscale's peers have recently been hit hard. CoreWeave (CRWV.US) lost a quarter of its market value last week, and its credit risk indicator rose to an all-time high; Nebius (NBIS.US) shares have fallen 32% over the past two weeks. Nscale publicly filed for a U.S. listing on September 18. Although the required 15-day waiting period has passed, the company has not yet begun its formal marketing roadshow. People familiar with the matter said the company is currently addressing comments from the U.S. Securities and Exchange Commission (SEC) on its filing and plans to launch the roadshow once those issues are resolved. The London-based company just completed a $3.36 billion pre-IPO funding round last month led by Dan Loeb's Third Point, with participation from NVIDIA Corporation, Apollo Global Management Inc. (APO.US), Citadel, Hudson Bay Capital and the Abu Dhabi Investment Council.