Surging Ai Use Accelerate Demand Neoclouds Jll
There is a growing demand for a new type of cloud solution known as neoclouds, as the adoption of artificial intelligence (AI) continues to increase at a rapid pace. According to research conducted by JLL, the demand for AI, combined with limited supply from traditional cloud providers, is leading to a rise in neocloud infrastructure as an alternative to hyperscalers.
Neoclouds are cloud solutions that specialize in high-performance graphics processing units (GPUs), also known as GPU-as-a-service (GPUaaS). Unlike traditional hyperscalers like Amazon Web Services, Microsoft Azure, and Google Cloud, which offer large-scale cloud computing services for a variety of use cases, neocloud providers offer on-demand access to GPUs that are specifically optimized for demanding AI and machine learning workloads. Some of the major neocloud providers include CoreWeave, Nebius, and Crusoe.
One of the major advantages of neoclouds is their ability to quickly deploy high-density GPU infrastructure, which is not common in traditional hyperscale data centers that often require long build times. Andrew Batson, the head of data center research for the Americas at JLL, also notes that neocloud providers have a competitive edge over traditional cloud providers by offering lower prices and more flexible terms. He adds that as AI continues to grow, its success will depend on access to GPU infrastructure, which neoclouds specifically cater to.
JLL predicts that the global neocloud segment will experience an impressive 82% compound annual growth rate between 2021 and 2025 due to the increasing competition for AI capacity and GPU resources.
However, JLL does not expect neoclouds to have a negative impact on hyperscalers. Since neoclouds specialize in AI workloads, hyperscalers are better equipped to provide a wide range of computing services that are preferred by many global enterprises.
Additionally, neoclouds require specialized infrastructure, including high power density and advanced cooling systems, which result in higher capital requirements and shorter lease terms. This increases the investment risk for neocloud infrastructure compared to traditional data centers.
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Ultimately, the success of neoclouds will depend heavily on investments, according to Mohd Syafiq, director of data center research for Asia Pacific at JLL. He notes that funding will play a crucial role in turning the potential of neoclouds into a tangible reality capable of handling the growing AI workload.