Perhaps the “best” argument for a permanent role for neocloud service providers is the relevance of enterprise private cloud inference services, which arguably cost less than public cloud providers.
While hyperscalers (AWS, Azure, Google Cloud) dominate general-purpose computing and model training, neoclouds (CoreWeave, Nebius, Hut 8 and others) have some advantages for inference operations, at least for the moment.
How sustainable that advantage might be is the question. But the logic for long-term relevance generally rests on a few key arguments.
Enterprises increasingly are wary of sending sensitive proprietary data (financial records, healthcare data, IP) to public multi-tenant clouds for inference.So neocloud providers can offer private services that , satisfy strict compliance (GDPR, HIPAA) and data sovereignty requirements that public clouds arguably struggle to guarantee.
The former bitcoin miners are essentially energy arbitrage firms. They have spent years securing the world's cheapest power contracts and building high-density cooling infrastructure. So they might have an advantage supporting services using high-performance graphics processing unitss (Nvidia H100s/Blackwell) at a lower marginal cost than hyperscalers.
Some believe neoclouds can undercut hyperscaler GPU hourly rates by 30 percent to 50 percent.
Neocloud providers also offer advantages in portability. Since neoclouds typically provide raw compute (Kubernetes/bare metal), enterprises can build portable inference engines. If a company wants to move their Llama 3 or Mistral inference workload from CoreWeave to Nebius to chase a lower price, they can do so easily.
Even if long-term evolution remains unclear, and even if questions about sustainability remain, virtually all forecasts project near-term revenue growth, though differing in the magnitude of those forecasts.
CoreWeave arguably has the greatest degree of revenue visibility, though, based on its backlog, which might be as much as two orders of magnitude greater than other competitors.
All that noted, perhaps the best rationale for a continued value chain role for the neoclouds is demand for private inference capabilities needed by enterprises.
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