Rent-a-GPU neoclouds need to adapt or die as the AI market evolves So-called neocloud companies are facing a dilemma: They need to move up the AI stack to avoid being commoditized, but they risk competing against their big hyperscale customers if they do. Neocloud operators, or GPU-as-a-service providers, sprang up to take advantage of the huge demand for compute using GPU accelerators for AI …
"New Jersey-based CoreWeave is one of the larger neocloud operators, and 77 percent of its revenue came from just two customers during 2024. Microsoft accounted for 62 percent, and Nvidia was understood to make up a large chunk of the rest."
So, wait, you buy GPUs from Nvidia, and then rent them back to them?!
https://www.theverge.com/business/828047/nvidia-enron-conspiracy-accounting
"Now, naturally, this caught my attention because I’ve recently used Enron as an analogy for what Nvidia is up to with the neocloud companies it funds:
“There is no neocloud that exists without [Nvidia CEO] Jensen [Huang],” says Saari. That makes neoclouds, in effect, extensions of Nvidia, he says. And none of them make money, so to expand, they must take on debt.
More and more, every day, AI is seeming like Dutch tulip bubble, the DotCom bust at turn of the century, and the collateralized mortgage debt implosion of 2008, It does no good that the Trump cabal have loosened financial regulations and embraced crypto. And let's not metion the great depression nearly a century ago, with same lax financial oversight.
Who benefits when the bubble bursts? Billionaires with the money to buy assets at pennies on the dollar. They may not benefit if the have made serious investments in AI.
But I have my Kruegerands and other gold holdings.
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