back to article Europe's cloud datacenter ambition 'completely crazy' says SAP CEO

The leader of Europe's most valuable company says there is no point in the continent building datacenters to try to compete with US cloud hyperscalers which have already invested in the region. A year ago [we] would not have thought about these kind of geopolitical conflicts we are having now Speaking at an investment …

  1. b0llchit Silver badge
    WTF?

    Give them your keys?

    SAP is not alone in questioning whether it is wise to seek separation at cloud infrastructure level.

    I'd say not separating from the US infrastructure puts us all at risk. Why the hell should Europe be dependent on US firms for critical infrastructure? Haven't these people learned from history?

    1. Doctor Syntax Silver badge

      Re: Give them your keys?

      He probably has a lot of US relationships - customers and suppliers - he needs to keep in with.

      1. kmorwath

        Re: Give them your keys?

        He's also afraid some serious EU competiror may arise from those investments and challenge SAP.... who would have believed that an online bookstore would become the main datacenter powerhouse?

        1. Gene Cash Silver badge

          Re: Give them your keys?

          > who would have believed that an online bookstore would become the main datacenter powerhouse?

          Remember that's because that online bookseller had tons of spare capacity laying around just to accommodate the end-of-year buying spree, so they decided to rent it out the rest of the year.

          Weird how things work out.

          1. Anonymous Coward
            Anonymous Coward

            Re: Give them your keys?

            Nope, completely wrong. Wasn't spare capacity, was identifying technology that helped Amazon innovate and scale and having the foresight to work out that other companies would pay for the same capabilities

            1. Anonymous Coward
              Anonymous Coward

              Re: Give them your keys?

              And bear in mind that Amazon had market cap of 'only' approx $8 billion when it initially created AWS, so not beyond the bounds for other large tech orgs to do similar, if they invest and commit in the same way

              1. theblackhand

                Re: Give them your keys?

                20 years ago, $8bn may have been enough to start a cloud computing company. Now you have to compete with the 5 largest providers who are already well established and have cululativrly spent $1tn+ to reach the current positions (AWS/Azure/GCP have spent ~$20+bn/year each for 10+ years with smaller investments in the previous 10 years).

                To enter the hyper scale realm now, you need to invest around $10bn/year and will likely need 2-3 years to start churning out newer, larger DCs to be competitive both in procurement and scalability to justify the spend.

                We are already seeing consolidation (Oracle and IBM using AWS/Azure/GCP) from those who have spent tens of billions as they can't compete with the data centre build rate of the largest providers when power and space are at a premium in thr regions with the largest demand.

                Can an existing mid-tier provider get a significant injection of capital ($40-50bn to cover a 5-10 year build out in Europe) to be genuinely competitive? Maybe but I doubt they will get the investment needed as they will likely struggle to be competitive even if there are stricter data protection requirements for EU data.

                1. Anonymous Coward
                  Anonymous Coward

                  Re: Give them your keys?

                  It could work if they aren't too ambitious and carefully map out the boundaries. If they try and compete with the big boys head to head, it'll just be a money pit, OUR money!

                2. cookiecutter

                  Re: Give them your keys?

                  They don't have to copy the hyperscalers, just offer services like kubernetes, virtual machines and networks etc. Don't need 2/3 of the stuff that Ms or aws offer for data integrity.

              2. Anonymous Coward
                Anonymous Coward

                Re: Give them your keys?

                Commercially it's a saturated market now. So, I don't think any competitor will arise without taxpayer money being wasted. EU & UK governments if they supported a competitor would meddle too much and they'd end up with another tax blackhole funding an extravagant lifestyle for friends and their retirement from politics into fake commercial jobs. If the EU or UK build a cloud it needs to be carefully defined and targeted. I'm not sure our governments could actually make it effective, they don't have a good track record.

          2. Anonymous Coward
            Anonymous Coward

            Re: Give them your keys?

            The online book seller not only had infrastructure but an open mind and a lot of support from backers who didn't demand immediate returns. He was also a techie as well as working in finance so open to new ideas and approaches. It also helped that he formed US government relationships as soon as viable. In all a very clever and astute dude.

    2. Anonymous Coward
      Anonymous Coward

      Re: Give them your keys?

      Europe population: 500M+ (including the biggish island with the succession of borked governments, but excluding the currently warmongering country with the very broken de facto dictatorship (who want to keep their data even closer to home anyway))

      USA population: only 350M

      If the USA can develop useful cloud infrastructure, Europe certainly can, and, indeed, with the way things are in the USA just now, certainly should.

      (Remember where GSM and the first successful smartphone OS originally came from, after all! And Linux, come to that…)

      What sort of pathetic quisling is this guy? And drinking the so-called-AI meths as well? What a sap, indeed…

      1. hoola Silver badge

        Re: Give them your keys?

        The big wins at the start were:

        Microsoft already had billions of $ sat in the bank

        Amazon was the darling of the US Venture Capital mob who threw millions at them to get billions back in inflated stock valuations.

        The likes of Google & Oracle then played catch-up but both had billions ot $ in the bank.

    3. Anonymous Coward
      Anonymous Coward

      Re: Give them your keys?

      So Rise with SAP sits on top of AWS, Azure or GC then ??

      More horseshit from SAP head-honcho.

      1. hoola Silver badge

        Re: Give them your keys?

        I think what he is worried about is being forced to use an EU service in place of AWS and it costs more.......

    4. hoola Silver badge

      Re: Give them your keys?

      Exactly, most of those who are critical are only seeing this in financial terms, not data security, infrastructure dependencies and political environment.

      It is blatantly obvious it will cost more to start with - in that case then the EU needs to do what it does best - throw subsidies at the solution.

  2. Doctor Syntax Silver badge

    So let's raise the stakes a bit. Introduce legislation to enable European governments to take possession of any critical infrastructure in the event of a foreign government ordering its shutdown an emergency. The government wouldn't have to run the infrastructure itself, it would just become the owner to whom the local management would answer and would also assume ownership of the contracts.

    If the sovereign arrangements are what they're cracked up to be it would never be invoked so it shouldn't affect Microsoft and the rest.

    1. Headley_Grange Silver badge

      I think that the issue which he's conveniently ignoring is the complete change in the international trade landscape that has been initiated by Trump - and I see no reason to assume that it will change after he goes. The days of price and functionality governing choice of products with a bit of grey around some legal stuff has been blown out of the water by a president who's willing to weaponise anything he sees fit to get what the last person he spoke to told him he needs to do. This, and the craven billionaires trying to buy favour is reason enough to start divesting from US tech in vulnerable areas.

      1. Doctor Syntax Silver badge

        The odd thing about it is that the quote in the article shows that he does see it - and then ignores it.

        1. hoola Silver badge

          The money and his bonus/salary/stock options come first.

    2. Michael Hoffmann Silver badge
      Unhappy

      Thing is: I'd be worried about a kill switch in case that happens.

    3. Anonymous Coward
      Anonymous Coward

      I'm not sure you can trust AWS/GCP/Azure/OCP etc to work with a government takeover. Even if they did I suspect there would be a slow degradation from cutting them away from the mothership from the people & support perspective. Where is the deep knowledge of the services?

      1. retiredFool

        I don't know about that. It took what 2 days for Leon to back down. And now, crickets. I guess he is sitting by the tele waiting for a call from his BFF. So even the richest man in the world shut up very quickly when he realized who really has the power. Orangy is taking his methods from Vlad.

        1. Anonymous Coward
          Anonymous Coward

          For an egotistical narcissist like Elmo, it must *really* grind his gears that for all that he's orders of magnitude more wealthy, he's still subservient to Trump- a failed and incompetent businessman only even worth *that* much because he inherited it from daddy and used it to spend his life cosplaying an idiots idea of a "dealmaker" when he'd have been just as wealthy if he'd bunged the lot in a tracker fund.

        2. JohnSheeran

          It really seems like his usual ADHD approach to everything. He goes off the deep end and rails against whatever/whomever made him unhappy and then apparently realizes/remembers he's the richest man in the world and goes back to all of his other craziness.

  3. Dan 55 Silver badge

    "apply AI, to apply intelligent software"

    CEO has no worthwhile opinion on the pressing IT issue of the day, uses opportunity to sell his snake oil.

  4. Filippo Silver badge

    >SAP offers concerned customers "complete sovereignty from the top to the bottom," he said.

    Right. So, let's assume my data is physically hosted inside Europe, but by a US company. If I understand correctly, this is the situation he's suggesting.

    Now, let's assume that I, as a EU company and/or citizen who does not particularly want to be subject to US laws and possibly does not even operate in the US, do not want my data to be handed over to the US government just because they asked.

    Finally, let's assume the US company gets a Cloud Act order to hand over my data to the US government.

    What exactly, dear SAP CEO, am I supposed to do in this scenario?

    I'll tell you: first, hope really hard that my goverment and the US government have an agreement on what happens, and that said agreement involves them getting permission from my government. If they don't, then my data is gone.

    Next, I have to hope really hard that the US government is actually respecting that agreement. If they don't, then my data is gone - but I might get redress in court, after a lot of time and a whole lot of money. But if the US government really feels like it, they'll find an excuse and I won't even get that. In fact, I might not even know that my data has been copied until long after the fact.

    And when I do know, and raise hell, what's going to happen anyway? The damage is done. And I can't even drop them and go to an EU cloud provider - because we've decided we don't need them!

    This is not what "complete sovereignty" looks like.

    1. may_i Silver badge

      Your government, or you, won't have that opportunity if the Cloud Act request is delivered as a National Security Letter.

      The data will simply be taken without anyone other than the recipient of the NSL knowing about it. You will never know about it happening.

    2. Anonymous Coward
      Anonymous Coward

      You should be encrypting any data you put in the cloud anyway, and regardless of the providers country of origin. If they don't let you I'd think twice about use them. All my icloud data uses Apple's advanced protection, but even then I only back up may apps, contacts, and photos.

      If they really had easy way to break encryption they wouldn't be trying so hard to use CSAM and terrorism as an excuse to mandate backdoors.

      1. localzuk Silver badge

        Encrypting all data in the cloud is not entirely possible - it needs decrypting at some point to serve it up. Not every app in the world is built so encryption is end to end - doing so would be impossible for the majority of online tools.

      2. hoola Silver badge

        Yes and no - what you are talking about is unstructured data.

        The real information is held in structured form such as databases. There is only so much you can encrypt and one suspects that in the event of a demand from the NSA (US Government) the options for the end customer will be:

        Any data that is accessible will have sucked out already

        Consent to the data being handed over

        Don't consent and lose all your data because you have breached some T&Cs and have your contract terminated.

        With any cloud service getting the data in is the easy bit. Getting it back is rather more complicated, time consuming and costly. The chances are in this situation that you will simply not get it back and go out of business.

    3. nichomach

      "Next, I have to hope really hard that the US government is actually respecting that agreement." - This, a hundred times over. We know that the current administration has reneged on agreements, treaties, even their own constitution, with little standing in their way. To continue to trust their intentions is madness.

  5. Groo The Wanderer - A Canuck

    Yeah, no "benefit" other than ensuring it complies with EU law, unlike the Americans who keep giving you the finger about the retention and privacy laws.

    1. ecofeco Silver badge

      Heart of the matter right there.

      He acts likes security and privacy have no real value. Which is typical of the tech douche bros.

  6. abend0c4 Silver badge

    There is no point

    There is no point in war - everyone ends up worse off. However, sometimes it is inevitable as the alternative is to end up worse off still.

    1. Anonymous Coward
      Anonymous Coward

      Re: There is no point

      Not true. A small number of people are enormously benefitted by war. That's why they happen. You can start by looking at banks and investment companies. They're all over Ukraine which is why it's carried on so long because they were betting on getting the resources and rebuilding money. It's looking shaky and they are a bit panicked because if Russia keep what they've got or more all the money goes to Russia and its supporters. They will widen the war if necessary because they are greedy nut jobs.

      1. fg_swe Silver badge

        Yeah Sure

        The old communist claptrap meme of "evil capitalists starting all wars". It can never be an unchecked idiot who has assumed total control of a state, can it ?

      2. Anonymous Coward
        Anonymous Coward

        Re: There is no point

        dipshit, forgotten who started all this crap? fucking fascist putin supported by fucking fascist wankers like you

        1. Anonymous Coward
          Anonymous Coward

          Re: There is no point

          And the US state department are just innocents? And the US (or EU) doesn't have to keep its agreements does it? Look in the mirror. You are the problem, you don't respect people and think your opinion must be correct so people must do what you want so and when someone tells you a few truths you become abusive. Do you know any of the history of Russia since the collapse of communism? Do you think it was a good idea to push them away and why would you do that?

    2. SundogUK Silver badge

      Re: There is no point

      "War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse."

      John Stuart Mill

  7. Lon24 Silver badge

    Do we need more Hype?

    My company has been using external servers/VMs for three decades which included one of the big three. In general we found the cost/value/performance was inversely related to the size of the provider. But then our needs are simple. We don't need the add-on they push.. Our favoured provider is an EU company and yes we have tried UK providers. We would again if they could match not just price but delivery and intelligent ticket response.

    Lucky to be small? And also keeping systems simple. Every so often we (that's me) has to do a spring clean to remove the complexity that inevitably creeps in. Once it gets too complex simplifying back may become impossible. Which is why I feel for so many IT systems people here having to try and manage stuff that has just grown into a huge tangled mess. Moving some responsibility out (and paying dearly for it) is the only way they can get home at night.

    Is that one reason why so many emergent companies can grow and become a great success before hitting a messy administrative ceiling before descending into an IT morass?

  8. Anonymous Coward
    Anonymous Coward

    The biggest challenge with the US these days is that even if there are laws in place to 'protect', everyone over that side of the pond seems happy to ignore/re-write/anul said laws at the whim of the orange one for fear of (completely unconstitutional) retribution so he can do whatever the f**k he wants to. And thank the Supreme Court for giving him effectively complete immunity for absolutely anything.

    1. ecofeco Silver badge

      The USA has flat out become a lawless rogue nation.

      But with nukes! Yay!

  9. ChoHag Silver badge

    "It would be crazy [for anyone else] to compete with the American clowns" says leading competitor to American clowns.

  10. Anonymous Coward
    Anonymous Coward

    Deport this guy to America. Lol. I half joke but if he wants to take this discussion and pivot to shill AI he's simpatico with Trump and the stooge crew.

    That means deportation is acceptable. So send him to his new home.

  11. This post has been deleted by its author

  12. Anonymous Coward
    Anonymous Coward

    I agree that trying to compete with AWS, Azure, GCP is a non starter but we would all be well advised not to put all our apples in the same basket. It could be done in law regarding critical infrastructure. The cloud obsession is fading now replaced with AI, albeit mostly via cloud but AI is not so critical. Losing AI might be disruptive but it isn't currently going to stop a business dead in its tracks. Hopefully, we will not be stupid enough to become fully dependent on AI ... oh shit we are that stupid aren't we?

    Back to cloud, I find it disturbing how the UK government, which ought to have the size to do private cloud / infrastructure economically has rushed into cloud. We do not know the future, we do not know what will happen if we lost comms to the US or even fell out with the US or the US descended into civil war as per that film. I'm sure the cloud vendors will assert it's no problem but then what else could they say?

    1. Peter2 Silver badge

      I agree that trying to compete with AWS, Azure, GCP is a non starter

      If we wanted to do it, then we could. It's not even that expensive. It'd cost $10 billion a year for a decade?

      For a block of 27 countries, that's like $370 million each per year. The UK's government spending per year is £1200 billion which is ~$1600 billion. There are individual British Government deals that El Reg has covered which are worth more than $370 million a a year.

      Just forbidding any government data being stored upon any system in the jurisdiction of a potentially unstable foreign power which has threatened to invade our allies would do the job. If the International Court of Justice can find their access to their IT systems cut off by America then clearly hosting any services anywhere that Americans have any control over them is severely imprudent and forcing our government to use suppliers within our own legal jurisdiction where that cannot happen is so obviously required that one wonders who signed off on putting the data abroad in the first place.

      And hey presto, if you can't put the data abroad then it's got to be either on prem, or on a cloud company in the EU. That cloud company would then suddenly receive a large influx of government orders which would fund expansion to create a European alternative to the hyperscalers within a decade or so.

      1. hoola Silver badge

        To put some perspective on this the Cloud Providers already have silos for US government contracts........

        Why, data segregation and security.

        Why the hell have we got into a situation where it appears most other countries are happy to host all the national ICT in is foreign cloud?

        My suggested answers:

        Cloud Kool-aid salesmen and nice bungs with trips to the US (and elsewhere)

        Too many people with no understanding of what they are doing

        Rank stupidity at Government (any government) levels.

        On the first I know the director of IT at the organisation I worked for got a trip out to "see how it worked"........

    2. Roland6 Silver badge

      Re. I agree that trying to compete with AWS, Azure, GCP is a non starter

      Agree, trying to ape the US majors is a non-starter, but we are not working under normal economic conditions. Trump only needs to wave his Sharpie out and suddenly a non-US business has no IT; under these conditions the US majors just can’t compete, the field is open to anyone who can get that companies IT up and running again.

      Thus building a comparable cloud infrastructure is just good sense and exploiting a market niche. However, Christian Klein is correct, we don’t need 20 different operators, we need to back a couple. There are probably enough datacentres already being constructed in Europe (or being emptied by companies moving to the cloud) to enable a rapid initial build out.

      I suspect it only needs the French, German and British governments to commit to a home/europe first cloud service and businesses will follow.

    3. _olli

      I have worked among corporate software solutions that were deployed to AWS, GCP and/or IBM clouds and am puzzled what's so scary about competing against AWS, GCP, IBM : These vendors provide scalable solutions that are technically doable but by any measure not technically superior, based much on open-source solutions, and their prices are not particularly cheap.

      Much of the stuff that companies deploy into these three-letter-vendor clouds are either virtual machines or various services running inside containers plus databases plus load balancers, and all that's quite standard technology.

      I don't really see a reason why European cloud vendors that can provide scalable cloud services based on open-source components with better prices that AWS couldn't win customers, in particular no the old continent.

      Azure is a slightly different basket if the solution architecture is locked into Microsoft solution, but that can be avoided by not designing solutions that are locked into Microsoft solutions.

    4. Groo The Wanderer - A Canuck

      Really? You don't think the EU's internal market is comparable to the Chinese internal market that Baidu courted to build a business equal to Amazon? There is no reason the EU couldn't support an Amazon of their own if they chose to.

      You buy the American bullshit because they advertise the shit out of it, promise you pie-in-the-sky-dreams before they tank your income stream and redirect it to theirs, and keep playing the fool for the tech bros and politician's bald-faced lies.

  13. fg_swe Silver badge

    IT Airbus

    Ideally there would be a government-funded "IT Airbus" corporation similar to he highly succesful Airbus airplane company.

    But even if that does not immediately materialize, there are plenty of starting points to wean yourself off the monopoly behemoths.

    In almost all sectors there exist little-heard-of alternatives such as Fujitsu SPARC, MaxDB, CompCert, SoftMaker or BS2000.

    Here is a list:

    https://di-fg.de/IT_Airbus.html

  14. Grindslow_knoll

    Not surprising for a CEO of dominating company to argue for no change at all (except to locked in pricing schemes).

    Infrastructure shouldn't be decided by CEOs with 4-6 month bonus horizons to optimize for, countries can create through policy a market environment that allows development of infrastructure (public/private).

    The real opportunity here is not to replicate, existing hyperscalers didn't rise to their position by replicating their competition either.

    Instead, you find a way to offer services to do much more for much less.

    You don't necessarily need larger datacenters, but instead much reduced software complexity, the amount of overhead to compute is for a lot of applications (e.g. 365) enormous.

    An alternative direction is to have national grid compute for R&D that is both public and private, e.g. Canada's supercomputer network is now offering spare compute to companies.

    1. fg_swe Silver badge

      Business vs Government/Academia

      The business world has radically different needs and practices than government agencies. There must be a COMPANY doing what you describe. It can and IS done very successfully with public money. Airbus, Volkswagen, Google, Hewlett-Packard, Oracle - they were all started with government financing. But they were allowed to operate as commercial companies instead of bureaucracies.

  15. ecofeco Silver badge
    Trollface

    LOL competition dis's comeptition

    He scared? He scared.

  16. Al fazed
    Facepalm

    er ?

    Q. Aren't datacentres simply individual islands of data ?

    I was taught that replicating the data is where the waste of resources lies.

    I doubt real thinkers in Europe are not thinking of merely replicating the Hyperscale Data Centers of the US providers, or competing with them. Competing isn't the point. Doing our own stuff, that which suits us better than off the US peg suits currently on offer.

    Independant computing is the goal I would imagine. And keeping that "knowledge" to our "friends group". Data sovereignty of this sort would also reduce the number of incidents of data compromise, I imagine.

    Many upstart companies use big data like the rest of us, but really I doubt that they all need hyperscale compute and AI processes, particularly processes that cannot be provided nearer to home, with greater levels of control to access without having to get permission from the US company and pay a fee for the privilege of getting our own data back.

    It just goes to show that politicians are still wanking on about tech stuff that they know very little about beyond the marketing spiel. Certainly they still appear to lack any real idea of how this will be delivered, or paid for, and for what Business Case.

    FFS Apparently the Post Orifice Oracle software was agreed and delivered without any Specification Document. And I don't see anything has improved since then when it comes to requisitioning IT services. Or in "timely delivery" of "the specified item".

    Surely someone this side of the pond can produce stuff that's better than Microsoft, Amazon, x, etc.

    ALF

  17. Anonymous Coward
    Anonymous Coward

    Take it with a pinch of salt

    He is speaking publicly.

  18. vekkq

    Last time I saw AWS and Azure price lists I assumed them to be a scam.

    1. Roland6 Silver badge

      When I saw a customer’s AWS bill was circa £500 pcm for a simple web fronted client relationship database application, I knew they were being scammed. Moved the application to a LAMP stack on a VM, now paying £200 pcm for a fully managed service, with no sudden bills due to AWS deciding to depreciate component services.

  19. This post has been deleted by its author

  20. vordan

    The real problem

    Europe’s debate over local datacenters isn’t just a matter of business - at this point, it’s about sovereignty and resilience. We’ve reached an era where data is the most valuable asset, and whoever controls it holds real power, not just economically, but politically and strategically.

    It’s naive to think that US protectionism is going away any time soon. If anything, we should expect it to intensify, no matter who sits in the White House. That means we cannot keep relying on US tech giants for our core infrastructure, hoping they’ll always act in Europe’s best interests. There’s a real risk - one that’s already materialized in other sectors - that access can be restricted or leveraged for economic or political gain. Our data, and the services that depend on it, could become bargaining chips overnight.

    It’s time for EU nations to stop dragging their feet and invest seriously in building up both local and pan-European datacenters. This isn’t just about creating jobs or supporting the local tech sector; it’s about ensuring that Europe retains control over its own future. Limiting the extent of US corporate influence in these projects is not protectionism - it’s common sense.

    The same urgency applies to AI. The pace of innovation in AI hardware and software is accelerating, and right now the US leads, with China closing in fast. If Europe doesn’t prioritize AI development - both in technology and infrastructure - we risk becoming entirely dependent on others for the next generation of digital tools. By then, the gap may be impossible to close.

    The bottom line: If Europe wants to be more than a customer in the digital age, we need to act now to secure our digital sovereignty. Otherwise, we may find ourselves with plenty of opinions, but no leverage at the table.

  21. dipole

    SAP has its own hyperscaler but is hyperscaler agnostic.

  22. Anonymous Coward
    Anonymous Coward

    its not the size but what you do with it

    having worked at length for the two of the hyperscalers, I have two cents to chuck in.

    First, these public clouds are stitched together with LOTS of duct tape. One bomb dropped in Virginia or Dublin (or other catastrophic events like non-optimised bad code emanating from AI) will take out the digital world as we know it. In my case, I figure about 80% of the apps (including bank and gov apps) will simply cease working. We, as a collective, have placed too many of our eggs in the public cloud basket.

    Two: if one really dives deep into what makes cloud tick, it is the management plane that lets one spin up VM's, containers, Serverless, really popular databases (looking at you Postgres, not Oracle :-)) etc with security/networking options supported on a defined set of h/w. It isn't that hard for the open source tribe or an entrepreneurial vendor (ideally, a few vendors) to create management plane that will run on the certified hardware with appropriate virtualisation innovations. Enabling and keeping up with security is the hard part, the way I see it. Heck, there is a lot of money to be made in subscriptions for companies brave enough to can do that. Pity that OpenStack didn't quite catch on and become that plane but it definitely can be done.

    It doesn't take $100B to compete with these hyperscalers, most of the spend is for capacity that is absorbed by a few large providers (think Netflix, Cloudflare, Youtube etc). Enterprise and Gov only use a fraction of the capacity stood up/investment being made, so it is a much smaller spend for sovereign Enterprise cloud.

    However, this is not true for GenAI workloads where one requires lots of GPU investment that these hyperscalers are making. but that business model continues to mystify me. Google recently breathlessly announced that their infrastructure served 500 trillion tokens a month. If one applies the 70/30 rule, where 30% of the tokens are paid for, say at an average price of $10 per million tokens, that barely works out to revenues of $20b a year for an investment of $80B a year in GenAI infrastructure that most of these hyper-scalers seem to average. We know that with most personal plans, no one is paying anywhere close to that, so it seems to be a loss leader for everyone. The only one making out like a bandit is Jensen Huang and crew, having gone from somewhere around $22B revenue in 2023 to $150B+ in annual revenues now.

    to (mis)quote the bard: Verily, I hath witnessed a spectacle so witless, mine very soul hath packed its belongings and fled mine body. T'is as though reason itself hath tripped over a turnip and perished.

  23. Tubz Silver badge

    A UK/EU partnership is probably one of the few entities that could challenge to become one of the big boys if it offers a secure full featured one stop shop to all its members, fully compliant and USA free, then start offering services to other industries like banking.

    I wonder why nobody has mentioned the prospects of an African owned cloud, as they would also be a perfect investment opportunity?

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