Nvidia chief Jensen Huang told the G20 Summit that a single gigawatt of AI data-center capacity now costs $50 billion to $60 billion to build, a figure that instantly revalues the pipeline of every neocloud operator racing to secure power. The estimate matters because it turns contracted megawatts into a balance-sheet asset that can be collateralized, pre-sold, or simply held as a mark-to-market rebuttal to skeptics who still price these companies on annual recurring revenue alone.
The pipeline math
Nebius disclosed a five-gigawatt contracted-power target for the end of 2026. At the top of Huang’s range, that pipeline represents $300 billion of future build cost, not revenue, not profit, but a concrete denominator for what the infrastructure might be worth once energized. The company’s own annual recurring revenue hit $3 billion in the second quarter, up from a negligible base a year earlier, with guidance for $7 billion to $9 billion by year-end. The gap between that ARR trajectory and the implied asset value of the power contracts is the entire investment thesis compressed into one spread.
Prepayments are pricing the megawatt
The clearest signal that the market already accepts Huang’s valuation is in the prepayment terms Nebius is extracting. The annual contract value per megawatt started the year at $12 million, pushed past $20 million in second-quarter deals, and is now being negotiated above $40 million for third-quarter slots. Those prepayments covered 50 percent to 60 percent of capital expenditures in the quarter, leaving the company with an $8 billion cash balance. Every upward revision in the per-megawatt price reduces the equity dilution required to fund the next site.
The collateral option remains unused
Iren chief Dan Roberts noted that prepayments can cover most capex, but also pointed out that his company’s entire data-center portfolio sits unencumbered. Nebius is in the same position. GPU-backed lending has been the primary debt route so far, but the facilities themselves represent a secondary, untapped credit facility. If lenders accept Huang’s $50 billion-to-$60 billion per gigawatt framework as a valuation floor, neoclouds could borrow billions against energized assets without selling a single additional share. That option does not need to be exercised to matter; its existence alone changes the risk calculus for equity holders.
What to watch
The bear case has always been capital intensity. Huang’s number does not eliminate that intensity, it quantifies it. The test now is whether the $40 million-per-megawatt prepayments hold as more capacity comes online, or whether they compress once the first five gigawatts are live. If the pricing sticks, the asset-value argument becomes self-reinforcing. If it cracks, the $300 billion pipeline reverts to a $300 billion liability.