The recent rise of AI Factory/Neocloud companies like CoreWeave, Lambda and Crusoe strikes me as feverish and financially unsound. These companies are highly overleveraged, offering GPU access as a commodity to a monopsony. Spending vast amounts of capex on a product that must be highly substitutive to compete with hyperscalers on cost strikes me as an unsustainable business model in the long term. The association of these companies with the 'AI Boom' could cause collateral reputation damage to more reputable firms if these Neoclouds go belly up.
And, if you're in a race-to-the-bottom price war on margins, fewer resources are devoted to risk management and considerate deployment. A recent SemiAnalysis article confirms the "long tail" of these companies that lack even basic ISO27001 or SOC 2 certs.
I should say that the Sovereign Neocloud model seems to alleviate both the financial and x-risk concerns; however, that's mostly relevant outside the US and China.
The recent rise of AI Factory/Neocloud companies like CoreWeave, Lambda and Crusoe strikes me as feverish and financially unsound. These companies are highly overleveraged, offering GPU access as a commodity to a monopsony. Spending vast amounts of capex on a product that must be highly substitutive to compete with hyperscalers on cost strikes me as an unsustainable business model in the long term. The association of these companies with the 'AI Boom' could cause collateral reputation damage to more reputable firms if these Neoclouds go belly up.
And, if you're in a race-to-the-bottom price war on margins, fewer resources are devoted to risk management and considerate deployment. A recent SemiAnalysis article confirms the "long tail" of these companies that lack even basic ISO27001 or SOC 2 certs.
I should say that the Sovereign Neocloud model seems to alleviate both the financial and x-risk concerns; however, that's mostly relevant outside the US and China.