Parasite
The rent-a-GPU business
Means buy available GPUs and then rent them out at a high markup.
Leech off small businesses who cannot afford to buy GPUs at extortionate prices after the rich have rigged the market.
Where is my tiny violin.
London neocloud Nscale takes its $1B loss to Wall Street
London-based neocloud Nscale has filed to go public on the New York Stock Exchange after expanding rapidly on the back of the AI infrastructure boom. The rent-a-GPU business, which emerged from cryptocurrency miner Arkon Energy, filed a Form S-1 registration statement with the US Securities and Exchange Commission (SEC) on …
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Tuesday 22nd September 2026 10:27 GMT cyberdemon
Re: Parasite
The thing is, as far as I am aware, they are not just buying the GPUs, they are buying the energy to run them. I.e. with each 1kW GPU they buy, they are on the hook for 8MWh/year, which at least in the UK would cost about £1000/year, per kW.
So it's not a simple "buy this expensive thing and rent it out, like a bank" It's more like buying a leaky bucket and having to keep it topped up. As more datacentres come online just as people lose interest in AI, the rents will have to come down, while energy costs are going up. It isn't just risky, it's stupid.
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Wednesday 23rd September 2026 09:34 GMT Charlie Clark
Re: Parasite
Well, the risk is really in the potential mismatch between liabilities versus assets (future income). Over time, the marginal price of AI will tend towards the price of electricity, because that is the dominant factor over time and that is, as you say, likely to get more expensive to cover the capital costs of increasing capacity, at the same time rents will have to be set to maximise utility of the rapidly depreciating GPUs. The hope for the neoclouds is that demand outstrips supply allowing them to increase prices, which we have seen to some extent over the last 18 months.
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Wednesday 23rd September 2026 21:42 GMT cyberdemon
Re: Parasite
Agree, up to the second half of your last sentence..
> The hope for the neoclouds is that demand outstrips supply allowing them to increase prices, which we have seen to some extent over the last 18 months.
Where is this 'demand' that you refer to coming from? Who actually wants to pay to use so-called AI, especially at these new higher prices?
I get that lots of people use it (often unwillingly, like me when I do a google search), but most are either paying nothing (or heavily subsidised loss pricing) like first time customers of a drug dealer, but who is actually paying full price?
Ransomware gangs, scam houses, perverts, terrorists, demagogues and totalitarian regimes may want it (which are all 'bad' use cases, you will note, that should not be counted in any honest company's 'demand' reporting) and perhaps the odd C-suite exec who is still deluded by its sycophancy and believes he can sack 90% of his staff and still have a company may want it (but if the company fails, then it's as bad as the other use cases) but the vast majority of us don't want it and will be very happy when it goes the way of the Hindenburg.
I have spoken to schoolteachers who absolutely hate it, but have been told from "on high" that they must use it, even when the kids are told that they absolutely cannot use it. It's absolute poison and I have no idea why it is being foisted upon us all. The only valid explanations are works of sci-fi dystopian horror.
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Thursday 24th September 2026 10:58 GMT Charlie Clark
Re: Parasite
Where is this 'demand' that you refer to coming from?
Thus far, mainly from programmers. It lead to resource scarcity in some situations forcing providers to rejig tariffs, especially "unlimited" options to reflect the realities of having to rent additional capacity. It's providing this additional capacity where the "neoclouds" hope to find their niche assuming that capacity is a commodity that can be easily traded – a bit like other commodities such as oil, though they seem to be ignoring the need for warehouses: commodity traders can and do sit on volumes of commodity during slumps, but effectively becoming a warehouse for GPUs isn't such a good idea.
This year, however, has seen the rice of Chinese open source models that are "good enough" encouraging more users to consider hosting either directly, via dedicated providers or on the spot market, using services such as OpenRouter. Of course, whether you want to run stuff on servers in China is another matter, but this does help set a ceiling for prices. OpenRouter occupies a more typical middleman position that stands to profit from the market and is presumably the reason why payments provider Stripe has agreed to buy it.
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Thursday 24th September 2026 17:39 GMT cyberdemon
Re: Parasite
Good grief. I can't think of anything more stupid than 'routing' my work to whichever LLM is cheapest on some f**ing 'spot market'!
You do realise that using a LLM for coding means sending your codebase and any other files that your IDE can access, (which may include credentials etc) to a potentially untrusted third party server, then downloading some slop code from that third party and most likely running it.
It should be called OpenRooter! I can scarcely believe anyone sane would go near it with a barge pole.
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Monday 21st September 2026 18:15 GMT Alan Mackenzie
Where're the regulators, for crying out loud?
A company with revenues of 100 million dollars and a debt of 1,000 million dollars shouldn't be eligible for listing on a stock exchange. It's broke.
It says it's got 44 Billion dollars of income in a contract, but it's got no money to be able to fulfill its side of its bargain. The other party to this contract, Anthropic, hasn't got any money to pay them, either. It's broke, too. It's all jam tomorrow. Maybe.
No doubt they'll find some fools to buy their newly issued shares. I just hope that my pension funds are not amongst them.
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Tuesday 22nd September 2026 08:17 GMT Charlie Clark
Re: Where're the regulators, for crying out loud?
This is one of the reasons why the listing will be in New York. Patient lobbying in America has led to rolling back of most of the regulations put in place after previous investment scandals. VCs love this, which means there is more capital there, making it more attractive for companies looking for capital. Until the next crash that is, when the investors will be looking for direct or indirect (lower interest rates, debt write-offs, etc.) handouts from taxpayers…
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Monday 21st September 2026 21:25 GMT Fruit and Nutcase
Re: Cashing out?
The Telegraph reports
"Sir Nick Clegg in line for up to £30m from AI deal
Ex-deputy PM holds over 900,000 shares in tech firm planning stock market debut
Sir Nick Clegg stands to make as much as $40m (£30m) from the Wall Street flotation of an AI company he joined six months ago."
https://www.telegraph.co.uk/business/2026/09/21/sir-nick-clegg-in-line-for-up-to-30m-from-ai-deal/
Kerching!
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Monday 21st September 2026 21:25 GMT Pete Sdev
Re: Cashing out?
Historically, an increase in IPOs happens just before a bubble bursts.
Just saying...
Despite its London headquarters and prominence in Britain's AI infrastructure sector, Nscale chose New York rather than London for its proposed listing. The company did not answer our question about why it selected the US exchange.
That might be down to that the SEC is even better at turning a blind apathetic eye than the FCA is.
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