Nebius (NBIS.US) received a $3.5 billion loan from Citibank, and the “money shortage” for AI cloud production expansion in Huang Renxun ushered in a turning point

The Zhitong Finance App learned that AI cloud company Nebius Group (NBIS.US) said on Thursday that it has reached a preferential guaranteed loan facility of 3.5 billion US dollars with Citi.

The company said, “The loan will facilitate the provision of capital at attractive interest rates, support Nebius' global capacity expansion, and advance the company's diversified, phased financing strategy.”

The loan facilitation period is 364 days, and the initial interest rate is SOFR for the term plus 2.75% annualization, which can be raised to a maximum of 3.50% annualized, and is affected by other adjustments.

The proceeds will be used for data center construction and GPU procurement, as well as general corporate purposes.

Scarce capital is holding back AI expansion

Earlier, Nvidia (NVDA.US) CEO Hwang In-hoon said that the market is “bursting” in demand for professional AI cloud providers, but as companies compete to build infrastructure for AI, limited financing channels are limiting its growth.

Hwang In-hoon said on Thursday, “If you look at the fundamentals, demand for new AI clouds is already bursting,” adding that these companies' capabilities are “extraordinary.” “What is lacking in the middle is working capital to fuel this growth... because AI is in huge demand in so many fields, capital is scarce,”

“The demand for capital far exceeds the supply of capital. This problem will be solved,” he added.

Funding concerns have been holding back AI infrastructure providers. CoreWeave (CRWV.US) shares faced a sharp sell-off last week as investors questioned the cost of financing its expansion. The company's bonds are under pressure, and bond yields have risen sharply.

Huang Renxun's remarks echo the concerns of Broadcom (AVGO.US) CEO Hock Tan (Hock Tan) — who also sees capital (not chip supply) as the biggest constraint on AI development.

Hwang In-hoon also called for increased investment in European AI infrastructure, saying that the region needs more NeoCloud providers to build an AI ecosystem and support the development of its AI economy.

Hwang In-hoon said, “We are working hard to launch an AI economy in Europe.” “Europe has massive technology, massive industry, and excellent science and technology. It is ready to participate and build an AI economy here.”