Jensen Huang told CNBC on Thursday that demand for neocloud firms is "off the charts," but a shortage of working capital is limiting expansion. He said the gap between capital demand and availability is large, though he expects the imbalance to be resolved. The comments were made on the sidelines of Nvidia's GTC conference in Berlin.
Huang highlighted electricity as a major bottleneck for AI growth, especially in Europe where power prices are higher. He noted that allocating scarce energy to firms such as Nebius and Mistral is essential, and that establishing local infrastructure is a prerequisite for building a self-sustaining AI ecosystem on the continent.
In pre-market trading Thursday, shares of neocloud players fell, with Nebius down about 3.6 % and CoreWeave slipping roughly 4 %. Comparable declines were seen in Iren and Applied Digital, each shedding close to 4 % as investors reassessed spending on AI infrastructure amid growing uncertainty in the market.
Analysts have expressed unease about the amount of debt CoreWeave is using to finance its data-center expansion, noting that the return on such investments may take longer than initially projected. The broader sector faces skepticism that the rapid build-out of AI compute capacity will translate into near-term profitability.
Nvidia is pursuing a European media tour this month, announcing a commitment of nearly $10 billion to support regional companies, universities and research institutes. During a visit to London, the chipmaker disclosed a stake exceeding $1 billion across five UK startups and also confirmed investments in several French AI ventures.
Huang concluded that Europe possesses substantial technology, industrial expertise and scientific talent, positioning it to develop an AI economy. He argued that once local neoclouds build the necessary infrastructure, a self-reinforcing AI flywheel can emerge, driving growth that remains within the European market.