Neoclouds are specialist providers that emerged in the 2020s, and they have transformed the market for cloud services. These companies offer cloud-based IT services with massive computing power provided by GPU clusters, which are extensively used for AI systems. Most neocloud companies started out in the crypto business where they developed a unique expertise in the development and management of high power-density, liquid-cooled datacenters. When the crypto market plunged, and mining was no longer attractive, they reinvented a business model focused on artificial intelligence, which was taking off with the launch of ChatGPT and other LLMs.
Neocloud development has also been driven by the investment of billions of dollars to cater to only a handful of customers
Partnerships serving AI pioneers
Pioneers like Open AI and Mistral needed massive computing power to train their models. Neocloud companies rapidly stepped in with offers of cheap access to vast GPU clusters. Acting as experts, they also struck subcontracting deals with hyperscalers like Amazon, Google, Microsoft and Oracle: cloud computing giants that supply more than 70% of the corporate IT services market.
Neocloud companies strongly developed ecosystems of links with key strategic partners. In particular with Nvidia, the predominant force on the global GPU market, which accounts for 90% of GPUs sold worldwide. It granted them priority supply deals which gave them a competitive edge and made them more attractive to their customers.
The value chain also relies on support from other key partners like power companies, datacenter builders and operators, and suppliers of specialist servers for AI storage needs. Neocloud development has also been driven by the investment of billions of dollars to cater to only a handful of customers: the builders of large language models for generative AI and research centres that run scientific models.
