The neocloud shakeout is coming, and Nvidia has the most to lose
After stock crashes and Firmus's scrapped IPO, industry executives expect only seven to ten of the hundreds of AI cloud providers to survive. CoreWeave lost a quarter of its market value, and Microsoft pulled out of a deal with Nscale for 23,000 Nvidia chips. Nvidia has a lot riding on the outcome, since customers outside the hyperscalers make up 45 percent of its data center revenue. The article The neocloud shakeout is coming, and Nvidia has the most to lose appeared first on The Deco
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Hundreds of AI cloud providers are entering the market, but industry experts predict that only a small fraction of them will survive the coming consolidation. Nvidia faces significant risk because nearly half of its data center revenue comes from customers outside major tech companies, including these emerging cloud providers, and the chipmaker is actively supporting them through investments, chip allocations, loan guarantees, and help locating power sources. The sector is already showing signs of strain, with stock declines, canceled IPOs, and power availability challenges at planned data center sites. Analysts warn that even if all announced projects are completed, an oversupply of computing capacity will eventually drive prices down.
Explainer: What Is a Neocloud? Why AI Chipmakers Are Becoming Cloud Providers
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