Nvidia (NASDAQ: NVDA) CEO Jensen Huang has placed a concrete dollar figure on the AI infrastructure buildout, estimating a 1-gigawatt facility costs between $50 billion and $60 billion to construct.
Huang delivered the estimate at the G20 Summit, offering the clearest public benchmark yet for the scale of investment flowing into next-generation AI data centers worldwide.
These facilities are considered critical infrastructure for scaling agentic AI, chatbots, and physical AI applications including humanoid robots and autonomous vehicles.
The valuation has significant implications for neocloud providers like Nebius (NASDAQ: NBIS), which build and operate these large-scale data centers on behalf of AI customers.
Nebius reported that its revenue jumped 454% year-over-year to $582 million in Q2, with annual recurring revenue reaching $3 billion and a target of $7 billion to $9 billion by year-end.
The company also projects five gigawatts of contracted power by the end of 2026, which using Huang’s valuation range could represent up to $300 billion in total facility value once fully built out.
That figure does not suggest Nebius should carry a $300 billion market cap today, but it does highlight how much underlying asset value exists beyond what annual recurring revenue figures capture.
One of the more consequential shifts driven by rising data center valuations is in how neoclouds are able to fund construction, with customer prepayments becoming an increasingly powerful financing tool.
Nebius noted in its Q2 shareholder letter that the annual contract value per megawatt stood at $12 million at the start of the year, climbed above $20 million in Q2, and short-term Q3 deals have been negotiated above $40 million per megawatt.
As a result, 50% to 60% of Nebius’ capital expenditures have been self-financed through prepayments, helping the company end the quarter with an $8 billion cash position.
Beyond prepayments, GPU-backed financing has served as another primary funding mechanism for neoclouds including both Nebius and Iren (NASDAQ: IREN).
Iren CEO Dan Roberts has said that prepayments can keep up with most of the neocloud’s capital expenditure needs, and the company noted its entire data center portfolio remains unencumbered.
That unencumbered status means Iren, like Nebius, could theoretically raise billions of additional dollars by borrowing directly against its physical data center assets.
Data center financing remains an available but largely untapped option, acting as a backstop resource if prepayments and GPU-backed lending prove insufficient for future expansion plans.
The combination of rising per-megawatt contract values, strong prepayment flows, and available asset-backed financing goes a long way toward addressing one of the central bearish concerns about neoclouds — how they fund the enormous capital requirements of continued buildout.
