Neoclouds Explained: The GPU Rental Firms Fueling the AI Boom

Ever wondered where companies like OpenAI get the massive computing power to run AI tools like ChatGPT? A new type of company called a neocloud has become the answer — and many of them started out in crypto.

What is a neocloud? A neocloud is a company that rents out access to powerful computer chips called GPUs (graphics processing units — special chips that handle the heavy math behind AI). Unlike giant "hyperscalers" (big cloud companies like Amazon, Microsoft and Google that sell hundreds of services), neoclouds focus on just one thing: providing GPU power for AI.

They have deep crypto roots:

• CoreWeave (now listed on the Nasdaq stock exchange) began in 2017 as an Ethereum crypto miner before switching to AI.
• Bitcoin miners are turning their power-hungry sites into AI data centers, signing deals worth over $135 billion in just two years.
• Miners already own valuable land, electricity connections and permits — things that take years to get.

How do neoclouds make money? They buy huge numbers of Nvidia chips, set them up in special data centers, and rent them to AI companies. They earn the difference between what customers pay and what it costs to buy and power the chips.

The big weakness: depreciation GPUs are expensive and lose value fast. "Depreciation" simply means how much an asset drops in value over time. For example:

• CoreWeave reported nearly $1.4 billion in depreciation against about $2.6 billion in revenue in Q2 2026.
• Nebius booked around $260 million against $582 million in revenue.

Why did their shares fall? In October 2026, neocloud shares (small ownership pieces of a company traded on stock markets) sold off sharply. This happened after research firm Gartner predicted that over 80% of these providers will stop operating independently by 2030 — meaning most could be bought out or shut down.

Bottom line: Neoclouds are the engines behind the AI boom, but they face high costs and an uncertain future. They offer fast, AI-focused computing power, yet many may not survive on their own.

This is an AI-generated summary. Read the original article at: https://decrypt.co/resources/what-is-a-neocloud-the-gpu-clouds-powering-the-ai-boom