Markos (AAIG) — neocloud returns now come down to yield on cost vs. 6–9% financing; watch dollar-per-megawatt pricing

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Markos (AAIG) — neocloud returns now come down to yield on cost vs. 6–9% financing; watch dollar-per-megawatt pricing

The clearest framework for the neocloud credit scare (posted Oct 14). A finished project earns a yield on cost (his example: 12%). Financing now runs about 6% for well-protected facilities and 9%+ for others, and he expects the better projects to pay low-7s. That leaves little cushion once build costs rise. His test for whether the stack's economics hold is higher dollar-per-megawatt pricing in new contracts.

Open on X Markos (@MarkosAAIG)
Markos✓ @MarkosAAIG
Oct 14

Well, no need to panic, but some things have to change, especially if you look at the AI infrastructure players. First, we need a credible de-escalation with Iran, because this could improve market expectations really quickly, with an impact on fuel prices and, therefore,

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The clearest framework for the neocloud credit scare (posted Oct 14). A finished project earns a yield on cost (his example: 12%). Financing now runs about 6% for well-protected facilities and 9%+ for others, and he expects the better projects to pay low-7s. That leaves little cushion once build costs rise. His test for whether the stack's economics hold is higher dollar-per-megawatt pricing in new contracts.

9 events
DateTypeEvent
Oct 16 tweetMarkos - Neocloud systemic risk is the B/C-tier wave borrowing against weak contracts, not the big names Oct 9 ArticleAI Money Bought Running Power Plants and Sold the Build-Out Oct 9 tweetSemiAnalysis — rising H100 rents break the depreciation curve lenders underwrite, with $7T of debt coming Oct 2 tweetSemiAnalysis — Google's GPU cloud climbs to Gold in ClusterMAX, but CoreWeave and Nebius are still the Platinum names it holds up as the bar Oct 1 tweetKawzInvests — open models now carry 61% of Vercel gateway tokens while H200/B200 rents rise and H100/A100 rents fall Sep 16 tweetParadis — Nebius raises rates on four-year-old H100s, and the GPU-depreciation bear case with them Sep 10 tweetM. V. Cunha — Nebius management at Goldman: demand visibility stretches to 24+ months, older GPUs stay economically relevant Oct 15 tweetKawzInvests — CoreWeave pays about 8.4% blended, not 15%; the real risk is the next financing Oct 16 Market BriefThe AI Trade Sold as One; Oil and Staples Took the Money

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