Milk Road AI(@MilkRoadAI):Jensen Huang just made some VERY interesting comments about the ongoing financing concerns surrounding neoclouds like $NBIS and $CRWV. One of the biggest concerns surrounding these companies has been their ability to secure financing at attractive rates, especially as borrowing costs continue to rise and investors become increasingly worried about their balance sheets. But Jensen made an important distinction. The problem isn’t a lack of demand for AI compute but rather that demand is growing so quickly that these companies need enormous amounts of capital just to keep up. According to Jensen, neoclouds are essentially completely sold out, with customers ranging from smaller companies to some of the largest enterprises in the world. And in order to fulfill these contracts, they need to secure more land, electricity, data centers, and GPUs, all of which require billions of dollars in additional capital. And because demand for capital is so high across the entire AI industry, borrowing costs are naturally being pushed higher. Jensen argues that this isn’t necessarily a structural problem with the neocloud business model. It’s a consequence of incredibly strong demand for AI compute. His argument is that financing challenges can eventually be solved when customer demand is there, but you cannot fix a business that simply doesn’t have customers. I think this is an important distinction because we’re seeing companies like $NBIS and $CRWV getting punished over financing concerns despite having substantial contracted demand and customers willing to commit billions of dollars to their infrastructure. Of course, this doesn’t mean every neocloud will survive. Some companies will struggle with debt, financing costs, and execution, especially if they cannot deploy their infrastructure quickly enough to generate revenue. And when Jensen was directly asked whether Nvidia would ever bail out a struggling neocloud, he didn’t commit to doing so. Instead, he explained that Nvidia invests in these businesses because it believes they’re attractive investments, not because it has an obligation to rescue them. Personally, I continue to believe the market is overreacting to some of these financing concerns, particularly for companies with strong customers and significant long term contracts. The underlying problem isn’t that nobody wants AI compute, it’s that everybody wants so much of it that the industry is struggling to finance and build capacity fast enough to meet demand.

2026.10.22 14:10

Jensen Huang just made some VERY interesting comments about the ongoing financing concerns surrounding neoclouds like $NBIS and $CRWV. One of the biggest concerns surrounding these companies has been their ability to secure financing at attractive rates, especially as borrowing costs continue to rise and investors become increasingly worried about their balance sheets. But Jensen made an important distinction. The problem isn’t a lack of demand for AI compute but rather that demand is growing so quickly that these companies need enormous amounts of capital just to keep up. According to Jensen, neoclouds are essentially completely sold out, with customers ranging from smaller companies to some of the largest enterprises in the world. And in order to fulfill these contracts, they need to secure more land, electricity, data centers, and GPUs, all of which require billions of dollars in additional capital. And because demand for capital is so high across the entire AI industry, borrowing costs are naturally being pushed higher. Jensen argues that this isn’t necessarily a structural problem with the neocloud business model. It’s a consequence of incredibly strong demand for AI compute. His argument is that financing challenges can eventually be solved when customer demand is there, but you cannot fix a business that simply doesn’t have customers. I think this is an important distinction because we’re seeing companies like $NBIS and $CRWV getting punished over financing concerns despite having substantial contracted demand and customers willing to commit billions of dollars to their infrastructure. Of course, this doesn’t mean every neocloud will survive. Some companies will struggle with debt, financing costs, and execution, especially if they cannot deploy their infrastructure quickly enough to generate revenue. And when Jensen was directly asked whether Nvidia would ever bail out a struggling neocloud, he didn’t commit to doing so. Instead, he explained that Nvidia invests in these businesses because it believes they’re attractive investments, not because it has an obligation to rescue them. Personally, I continue to believe the market is overreacting to some of these financing concerns, particularly for companies with strong customers and significant long term contracts. The underlying problem isn’t that nobody wants AI compute, it’s that everybody wants so much of it that the industry is struggling to finance and build capacity fast enough to meet demand.

Melvin@MelvinInvests

2026.10.22 13:13

Nebius just secured a $3.5 billion financing facility from Citi to help fund its global AI infrastructure expansion, including data centers and GPU purchases. What makes this particularly interesting is the financing terms. The facility has a 364 day maturity and carries an initial interest rate of SOFR + 2.75%, potentially increasing to SOFR + 3.50%. SOFR is essentially a benchmark interest rate that banks use when lending money, meaning Nebius is borrowing at a relatively modest premium above that benchmark. Now, remember one of the biggest concerns surrounding neoclouds recently has been their ability to secure financing at attractive rates. Investors have been worried that companies like Nebius and CoreWeave would struggle to raise the billions of dollars needed to continue expanding, especially with borrowing costs remaining elevated and credit markets becoming increasingly cautious. Well, this announcement directly challenges that concern, at least for Nebius. Not only has Nebius secured another $3.5 billion in financing, but it has managed to do so at what I consider fairly attractive rates for a capital intensive AI infrastructure company. And here’s another important point. Nebius already has more than $40 billion in long term customer commitments from investment grade customers, including Microsoft and Meta. Those contracts give lenders greater confidence that the infrastructure being financed will eventually generate revenue. I’ve said this repeatedly, I don’t believe every neocloud will survive this AI infrastructure buildout. Access to capital is going to separate the winners from the losers, and Nebius continues to demonstrate why I believe it will be among the survivors. This is a very encouraging development for $NBIS shareholders, especially after all the concerns surrounding financing and the recent selloff.

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