Article · AI translation
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IT Home reported on October 25 that, in an interview with U.S. broadcaster CNBC on the 22nd local time, Nvidia CEO Jensen Huang said demand for neocloud providers was extremely strong, “off the charts,” but a shortage of capital was becoming the main obstacle to the industry’s development. “Fundamentally, market demand for neocloud providers is very strong.”
He also described these companies’ capabilities as “extraordinary.” “What is most lacking right now is the working capital to support their growth... There is tremendous demand across every area of AI, leaving capital in short supply. The market needs far more capital than is actually available, but the problem will eventually be resolved.”
Electricity supply is also constraining the AI industry’s development. The problem is particularly pronounced in Europe, where electricity prices are relatively high.
Huang noted that Europe’s energy supply is tight and that ensuring companies such as Nebius and Mistral have enough electricity is crucial to their expansion. “Europe can attract foreign investment, but only if it has its own infrastructure. If Europe’s neocloud providers can build infrastructure locally, they can use it as a foundation to develop an AI ecosystem and AI economy, start the AI economy’s growth flywheel in Europe, and create a complete cycle there. Europe as a whole also needs more neocloud providers.”
Shares of neocloud providers such as CoreWeave and Nebius have faced sustained selling recently. Investors are increasingly concerned that these companies have spent heavily on building AI infrastructure and that recouping their investments may take longer than expected.
CoreWeave’s debt has also raised concerns among investors. As one of the industry’s major companies, CoreWeave relies heavily on borrowing to fund data center construction.
Shares of neocloud providers continued to fall in U.S. premarket trading that day. Nebius fell 3.6%, CoreWeave fell 4%, and Iren and Applied Digital each fell nearly 4%.
Nvidia is seeking to increase its investment in Europe’s AI industry, and Huang has given a series of interviews to European media this month. Nvidia has pledged to invest nearly $10 billion in local companies, universities and research institutions (IT Home note: approximately 66.892 billion yuan at the current exchange rate).
During a visit to London last week, Nvidia announced that it had taken stakes in 5 British startups worth more than $1 billion (approximately 6.689 billion yuan at the current exchange rate). Nvidia has also invested in several French startups.
Huang said: “We want to advance the development of Europe’s AI economy. Europe has strong technical capabilities, extensive industrial experience and excellent research capacity, and is ready to participate in and develop the AI economy locally.”