Nebius, a neocloud company, is experiencing higher-than-expected AI computing prices, according to Marc Boroditsky, its chief revenue officer. Boroditsky said the company's 2027 computing capacity would sell out if brought online, anticipating a similar demand dynamic for 2028.
Investors have grown wary of the business models underpinning neocloud firms, specifically the extensive debt used to finance data center construction. CoreWeave, a major player in the sector, recently saw its five-year credit default swaps reach distress levels, with its bond yields climbing.
The market reaction to CoreWeave's financial metrics has weighed on other neocloud providers, including Iren and Nebius, whose stocks dropped sharply over the past month. Boroditsky said Nebius carries less debt than CoreWeave.
Nebius conducted an auction for computing capacity on Tuesday that confirmed continued price increases. Boroditsky noted the ongoing "upward mobility in terms of the kind of price per megawatt," a key metric indicating how much a company can charge for computing capacity.
Crusoe CEO Chase Lochmiller also expressed a bullish outlook on pricing. Crusoe, an Nvidia-backed AI company that builds data centers, is reporting higher prices for graphics processing units, including older Nvidia chips.
Lochmiller said Nvidia A100 GPUs are commanding higher prices today than they did in 2020 or 2021. H100 GPUs are renting at higher prices now compared to their initial deployment in 2023.
"There's tremendous demand and a lot of it is because the underlying model capabilities have gotten so much more advanced that people are just creating so much more value out of the compute infrastructure," Lochmiller said.
The trend challenges an ongoing investor debate about how quickly Nvidia GPUs lose economic value as newer, more powerful chips enter the market. The ability to rent older chips at attractive prices is crucial for AI infrastructure companies to recoup significant investments and achieve profitability.
For companies like Crusoe, older generations of Nvidia chips are retaining strong rental prices, potentially bolstering the economic viability of their AI cloud operations. Nebius stock rose on Wednesday.
