The cash flow mismatch of building data centers first and leasing them later is driving cloud vendors to seek external financing. JPMorgan's macro equity research team estimates that the FCF gap for AI businesses may begin to narrow from 2028 as existing capacity contributes to revenue and capital expenditure growth slows. Based on the B200 data center model (550,000 GPUs per GW, annual operating costs of $1.5 billion, $60 billion in upfront capital expenditure, and 90% utilization), the ROI of hyperscale data centers is approximately 30% over 5 years of depreciation. Even with higher interest rates, the burden of incremental financing is relatively mild compared to profit scale, and expenditures are almost insensitive to interest rates. JPMorgan believes that equipment and labor procurement, approvals, and power supply will more directly constrain the construction speed.
