AI cloud pricing rises as new data center leasing slows, creating supply constraints in the GPU compute market.

AI cloud contracts are clearing at roughly $15 million to $20 million or more in annualized revenue per megawatt (MW), up from approximately $10 million on earlier agreements, according to a Needham industry update. Meanwhile, new-site data-center leasing has stalled.

"Importantly, we continue to view power availability, not customer demand, as the primary constraint on growth across both Cloud and Co-location operators," wrote analysts John Todaro, Michael Chen and Austin Ortiz.

CoreWeave's three-to-six-month contracts have reached about $40 million per critical IT MW on an annualized basis. Shorter contract terms command premiums, however, and comparisons also depend on GPU type, customer credit quality, and definitions of gross-versus-IT power.

Needham estimated annualized revenue at $16.6 million per MW for Lambda's Anthropic agreement and $16.3 million for Nscale's Anthropic deal. Bitdeer's contracted A201 capacity in Malaysia implied $22.4 million per MW.

Colocation operators covered by Needham signed just over 1.4 gigawatts (GW) of critical IT load in Q3, compared with just over 1.5 GW in Q2. Activity concentrated early in the quarter, with more than 50 days passing without a new-site lease announcement by the time of the note.

The analysts expect few large new-site leases before November's midterm elections and few, if any, in Texas before ERCOT approvals, expected in December. Governor Greg Abbott's data-center permitting pause ties permit issuance to completion of the ERCOT review.

Needham favors newer cloud operators with established power pipelines but has raised concerns about CoreWeave's access to additional capacity. Operators consulted by the analysts also flagged increasing difficulty obtaining project-level financing.

TeraWulf's Muskie site in Kentucky, with 800 MW of critical IT capacity, represents a possible near-term leasing exception, given that Kentucky has faced less political pushback. Needham set a $33 price target for TeraWulf against a $14.91 share price, implying approximately 121% upside.

Powered-land transactions were clearing around $500,000 to $1 million per MW, above 2024 and 2025 levels in Needham's tracking. Location, acreage and time to power materially affect comparisons between sales.