At GTC Berlin, Jensen Huang says he urged UK-based neocloud Nscale to "work around the clock" to resolve data center delays amid investor doubts about its IPO

The cost to deploy AI workloads falls significantly for those needing more compute power.

Nvidia CEO Jensen Huang stated that demand for "neoclouds" is exceptionally high, describing it as "off the charts." However, he noted that a scarcity of working capital is impeding the growth of these cloud infrastructure providers. Huang elaborated that the demand for capital to fuel this expansion far exceeds its current availability, though he believes this issue will be resolved. He highlighted power as a significant constraint, particularly in Europe, where higher electricity prices and limited energy allocation impact companies. Huang emphasized the necessity for neoclouds in Europe to establish their own infrastructure to support the growth of the AI ecosystem and economy in the region. This comes as neocloud stocks like CoreWeave and Nebius have experienced recent sell-offs due to investor concerns about the long payback periods for AI infrastructure investments and the substantial debt taken on by companies like CoreWeave.

Huang's comments underscore a critical bottleneck in the AI boom: capital. While demand for compute is insatiable, the ability to fund the physical infrastructure—data centers, power, cooling—is lagging, leading to investor caution and stock price declines for key neocloud providers. This capital scarcity, coupled with power constraints, suggests a potential slowdown or at least a re-evaluation of the rapid expansion pace for AI infrastructure in Europe and globally.

The situation signals a potential shift where companies might need to secure more robust, long-term capital or explore more efficient infrastructure solutions to meet demand. Investors are scrutinizing debt levels and return timelines more closely, indicating a maturing market for AI infrastructure that requires a more disciplined approach to scaling. The success of neoclouds will increasingly depend on their ability to navigate these capital and energy challenges while demonstrating clear paths to profitability.