Nvidia CEO Huang Says Neocloud Demand Off Charts, Capital Scarce

Nvidia CEO Jensen Huang told CNBC on Thursday that demand for AI neocloud firms is off the charts, from the company’s GTC conference in Berlin. He said the capabilities are extraordinary.

Huang said the missing piece is working capital. He said there is just so much demand across so many sectors of AI that there is a scarcity of capital. He added that the demand for capital is much greater than the availability of capital, but said that this will get solved.

Power is a major constraint for the AI boom, particularly in Europe, where electricity prices are higher. Huang said the allocation of energy, which is scarce in the region, to companies like Nebius and Mistral is crucial for their growth.

He said investments can be brought into Europe, but the companies must start with their own infrastructure. If the neoclouds in Europe are able to establish infrastructure there, then they can build the AI ecosystem and the AI economy on top of it, he said. The flywheel of the AI economy will start in Europe and end in Europe, he added.

Across all of Europe, he said, a lot more neoclouds will be needed.

Neocloud stocks such as CoreWeave and Nebius have been selling off recently as concerns grow over how much companies are spending on the AI infrastructure buildout. The return on investment is set to take longer than expected, investors said. They are also wary of how much debt CoreWeave is using to fund its data center buildout.

Neocloud stocks were lower in premarket trading on Thursday, with Nebius down 3.6% and CoreWeave 4% lower. Iren and Applied Digital also shed nearly 4%.

Huang has been on a European media blitz this month as the chip giant looks to expand investments in the region’s AI sector. The company has committed nearly $10 billion towards companies, universities, and research institutions.

While visiting London last week, Nvidia announced a stake worth over $1 billion in five U.K. startups. The chip giant is also investing in various French startups.

We are trying to kickstart the AI economy in Europe, Huang told CNBC. Europe has a tremendous amount of technology, industrial know-how, and incredible science and technology, and it is ready to engage and build the AI economy here.

Source: CNBC