Melvin lays out the case that AI compute demand is outpacing the supply of chips, memory, power and data-center capacity. He contrasts October’s selloff in neocloud stocks with rising H100 rental prices, arguing that weak share prices do not reflect weakening demand for the underlying compute.
SpaceX’s growing AI segment, Nvidia’s push for European AI factories and Nebius’s frequent GPU repricing all point to the same constraint. Meta offers the clearest example: despite plans to spend up to $145 billion in capex this year, it says limited compute is preventing a global launch of Muse after the agent reached more than 10 million users in six weeks.
The investment takeaway is selective rather than indiscriminate. Melvin remains bullish on leading neoclouds such as Nebius, while warning that many providers may fail because financing, construction and power remain major obstacles.
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