There was a time when we considered improving the #EnergyEfficiency of #backend services by switching from interpreted to compiled languages, out of concerns about #ClimateChange. Then came the #CryptoMining farms, AI #hyperscalers and #neoclouds - monstrosities that #pollute grotesquely and guzzle as much power as some nations. And people quit talking about climate change. Everyone seems to have given up in despair and accepted their fate!
Damn those #profiteering #psychopaths!
A new class of cloud providers is already here, and they’re called “neoclouds”, but you’ll be forgiven if this is the first time you’re hearing about it. You see, unless you’re in the AI space, these could have passed you by, that’s because ’neocloud’ refers a new class of cloud providers that are specialised in AI. A neocloud provider specifically focuses on the infrastructure services that are needed for AI, such as GPU-as-a-service (GPUaaS), or bare-metal-as-a-service (BMaaS), that are optimised for AI workloads.
A new class of cloud providers is already here, and they’re called “neoclouds”, but you’ll be forgiven if this is the first time you’re hearing about it. You see, unless you’re in the AI space, these could have passed you by, that’s because ’neocloud’ refers a new class of cloud providers that are specialised in AI. A neocloud provider specifically focuses on the infrastructure services that are needed for AI, such as GPU-as-a-service (GPUaaS), or bare-metal-as-a-service (BMaaS), that are optimised for AI workloads.
"Beneath the surface of the AI "revolution" lies a dirty secret: that most of the money is one of four companies feeding money to a company incubated by NVIDIA specifically to buy GPUs and their associated hardware.
These Neoclouds are entirely dependent on a continual flow of private credit from firms like Goldman Sachs (Nebius, CoreWeave, Lambda for its IPO), JPMorgan (Lambda, Crusoe, CoreWeave), and Blackstone (Lambda, CoreWeave), who have in a very real sense created an entire debt-based infrastructure to feed billions of dollars directly to NVIDIA, all in the name of an AI revolution that's yet to arrive.
Those billions — an estimated $50 billion a quarter for the last three quarters at least — will eventually have the expectation of some sort of return, yet every Neocloud is a gigantic money loser, with CoreWeave burning $300 million in the last quarter with expectations to spend more than $20 billion in capital expenditures in 2025 alone.
At some point the lack of real money in these companies will make them unable to pay their ruinous debt, and with NVIDIA's growth already slowing, I think we're watching a private credit bubble grow with no way for any of the money to escape.
I'm not sure where it'll end, but it's not going to be pretty."
https://www.wheresyoured.at/is-there-any-real-money-in-renting-out-ai-gpus/
#AI #GenerativeAI #Nvidia #Neoclouds #CoreWeave #Lambda #Nebius #GPUs
NVIDIA has become a giant, unhealthy rock on which the US markets — and to some extent the US economy — sits, representing 7-to-8% of the value of the market and a large percentage of the $400 billion in expected AI data center capex expected to be spent this year, which in
Till earlier this month, Wall Street was buzzing over neoclouds—firms raising billions in funding for Nvidia GPUs. Now, DeepSeek’s low-cost AI model is shaking things up. Today’s Number Theory dives into neoclouds' rapid rise and their funding risks in the backdrop of DeepSeek.
Read online on HT app: https://www.hindustantimes.com/editors-pick/number-theory-can-the-gpu-neocloud-party-go-on-forever-101738118993299.html
Gokul Das
James Read
Benjamin Carr, Ph.D. 👨🏻💻🧬
Miguel Afonso Caetano
Sreedev Krishnakumar