Nvidia's Huang: Neocloud Demand 'Off the Charts,' but Capital Is the Bottleneck

Demand for neocloud companies is far outpacing the money available to fund their growth, Nvidia CEO Jensen Huang said Thursday, speaking to CNBC's Arjun Kharpal at the company's GTC conference in Berlin.

Huang described demand from neocloud firms as "off the charts" and their capabilities as "extraordinary," but pointed to a gap in the middle of the equation. "What is missing in the middle is the working capital to fuel that growth... because there's just so much demand across so many sectors of AI, there's a scarcity of capital," he said. The need for capital, he added, "is much greater than the availability of the capital. That's going to get solved."

Energy is another obstacle, especially in Europe, where power is scarce and electricity prices run high. Huang said allocating energy to companies such as Nebius and Mistral is essential to their expansion. "You can bring investments into Europe, but you have to start with having your own infrastructure," he said, arguing that European neoclouds which build infrastructure locally can support an AI ecosystem and economy on top of it. "Across all of Europe, you're going to need a lot more neoclouds."

Neocloud stocks have been under pressure as investors question the scale of AI infrastructure spending and how long returns will take, along with the debt CoreWeave is carrying to build data centers. Nebius fell 3.6% and CoreWeave 4% in premarket trading Thursday, while Iren and Applied Digital each dropped nearly 4%.

Huang has spent the month on a European media push as Nvidia looks to expand its investments in the region's AI sector, committing nearly $10 billion to companies, universities and research institutions. In London last week, Nvidia announced a stake worth over $1 billion in five U.K. startups, and it is also investing in French startups. "We're trying to kickstart the AI economy in Europe," Huang said, citing the region's technology, industrial know-how and science base.

Source: CNBC