Nvidia CEO at GTC Berlin: Neocloud Compute Demand Strong, Capital Crunch Limits Growth

At the GTC conference in Berlin on Oct. 22, Nvidia CEO Jensen Huang said demand for compute capacity from neocloud providers is extremely strong, but a shortage of capital is holding back the sector's growth.

Neocloud providers are emerging cloud companies that purchase servers equipped with AI chips and lease out computing power to AI businesses. Huang said the missing piece is the working capital needed to fuel their expansion, and that funding across the AI industry falls short of what is required. He expressed confidence the issue will eventually be resolved.

Huang also highlighted electricity supply as a key bottleneck for the AI boom, especially in Europe where energy prices are high and supplies are tight. He urged European neocloud providers to build local infrastructure, arguing that would help develop an AI ecosystem and economy in Europe.

The comments come as shares of CoreWeave, Nebius and other neoclouds have fallen recently amid concerns over heavy AI infrastructure spending and longer-than-expected return cycles. In premarket trading on Oct. 22, Nebius fell 3%, while IREN and CoreWeave dropped 4%.

Nvidia has pledged nearly $10 billion to European companies, universities and research institutions. During a visit to London last week, it announced equity investments of more than $1 billion in five UK startups. Huang said Nvidia is working to help jump-start Europe's AI economy.