In short
- Neocloud is a specialized cloud service provider, such as CoreWeave and Nebius, that rents out Nvidia GPU clusters to AI labs, startups, and large technology companies.
- Many companies have crypto backgrounds: CoreWeave began with Ethereum mining, and Bitcoin miners have signed billion-dollar AI hosting agreements with Microsoft, Amazon, and Anthropic.
- Gartner predicts that by 2030, more than 80% of suppliers will no longer operate independently, leading to a sell-off of neocloud stock in October 2026.
Training and running modern AI models requires massive computational power, almost entirely sourced from graphics processing units (GPUs). Over the past decade, renting servers typically meant choosing one of the three major "hyperscale cloud providers": Amazon Web Services, Microsoft Azure, or Google Cloud. As the ChatGPT boom triggered intense competition for GPUs, a new class of companies has emerged to meet this demand—known as neocloud.
Neocloud is a specialized cloud service provider that does one thing only: rents out GPU computing power for AI training and inference. Inference refers to running trained models to respond to requests. They have grown from obscure startups into a publicly traded company with billions of dollars in contracts, and have deep ties to the crypto industry. CoreWeave began as an Ethereum miner, and a wave of Bitcoin miners are now converting their power-hungry sites into AI data centers.
This guide explains what neoclouds are, how they operate, who the key participants are, and why their stock prices plummeted in October 2026.
What is neocloud?
Neocloud is an infrastructure-as-a-service (IaaS) provider focused on AI. While hyperscale cloud providers offer hundreds of services—from databases to email hosting—Neocloud primarily sells access to high-end GPU clusters, along with the networking, storage, and software needed to run AI workloads on them. CNBC describes them as a company that “provides access to the GPUs powering AI as a service.”
The most well-known neoclouds include:
- CoreWeave (Nasdaq: CRWV): Backed by Nvidia, it is the largest pure-play neocloud. The company went public in March 2025.
- Nebius Group (Nasdaq: NBIS): Headquartered in Amsterdam, spun off from the international operations of Russian tech giant Yandex.
- Lambda, Crusoe, and Fluidstack are privately held GPU cloud providers, though Lambda is conducting its final funding round ahead of its planned IPO.
- IREN: An AI hosting provider that transitioned from a Bitcoin miner and now operates its own AI cloud.
Neocloud is a company, not a blockchain, and therefore does not issue a native token. Its shares are traded on traditional stock exchanges.
Did you know?
CoreWeave began using GPUs to mine Ethereum in 2017. After Ethereum transitioned to proof-of-stake in 2022, GPU mining on the network ended, and CoreWeave shifted its hardware focus to AI and cloud services.
How does Neocloud work?
The Neocloud model boils down to three scarce resources: chips, electricity, and capital.
- Chip. Neocloud will purchase large quantities of Nvidia GPUs and network them into clusters designed specifically for AI. Priority access to the next generation of Nvidia systems is a major selling point.
- Power and space. AI clusters require hundreds of megawatts of power and liquid cooling. Neocloud either builds its own data centers or leases “powered shells” from providers, including Bitcoin miners transitioning into AI hosting companies.
- Capital. GPUs are expensive and depreciate rapidly. Neocloud typically finances its operations through debt, which is often secured by the chips themselves and long-term customer contracts.
Customers such as AI labs, large tech companies, and startups sign multi-year agreements to reserve computing power or pay on-demand by the hour. Neocloud’s revenue comes from the margin between income generated by GPUs and the costs of purchasing, powering, and financing them.
The weakness lies in depreciation. In its Q2 2026 earnings report, CoreWeave reported depreciation and amortization of nearly $1.4 billion against revenue of approximately $2.6 billion; Nebius reported depreciation and amortization of approximately $260 million against revenue of $582 million.
What makes NeoCloud special?
Neocloud’s competitive edge lies in speed and focus. Hyperscale cloud providers allocate GPUs across multiple services, including their own AI products; Neocloud, by contrast, can rapidly deliver large, dedicated clusters with software optimized specifically for AI rather than general-purpose computing. Some of its largest customers are themselves hyperscale cloud providers, who rent Neocloud’s computing power when their own data centers cannot keep up with demand.
This industry also offers bitcoin miners a second chance. According to Bernstein, over the two years ending in July 2026, miners signed agreements for approximately 7 gigawatts of power capacity through 19 transactions with hyperscale cloud providers, neoclouds, and chip manufacturers, totaling over $135 billion. This represents less than a quarter of the 30 gigawatts of power capacity miners have planned. The truly valuable assets are power: miners already own land, grid access, and permits—resources that typically take years to secure.
Did you know?
TeraWulf signed a 20-year lease agreement for its Kentucky campus with Anthropic. The transaction is expected to generate approximately $19 billion in revenue, exceeding TeraWulf’s entire market capitalization at the time.
Who is collaborating with neocloud?
- Microsoft: One of the major buyers of neocloud's computing power, including a five-year GPU cloud contract worth approximately $9.7 billion with IREN.
- Amazon Web Services: Signed a 15-year, approximately $5.5 billion lease agreement with Cipher, an AI hosting provider that transitioned from Bitcoin mining, for AI computing power.
- Google: Guarantees Fluidstack lease payments for websites operated by TeraWulf and Cipher.
- Anthropic: This AI laboratory leases computing power from TeraWulf and also leases computing power from Hut 8 via Fluidstack.
- Nvidia: the primary chip supplier for Neocloud and an investor in CoreWeave.
Do you have NEOCLOUD tokens?
No. Neocloud is a traditional company. The closest crypto equivalent is a Decentralized Physical Infrastructure Network (DePIN), such as Render, Akash, and io.net. These projects use tokens to pay for GPU computing power and reward individuals who provide it. They target the same market but use a peer-to-peer model instead of company-owned data centers.
Where can I buy Neocloud stock?
CoreWeave (CRWV), Nebius (NBIS), and IREN (IREN) are traded on Nasdaq and can be bought and sold through major brokerages. Other publicly listed AI hosting companies that have transitioned from Bitcoin mining, including TeraWulf, Cipher, Hut 8, and Core Scientific, also provide investors with exposure to AI hosting services. Native crypto ecosystem compute tokens, such as Render (RENDER), are traded on major exchanges. All of these assets should be considered high-risk, high-volatility investments.
The future of Neocloud
The industry is under significant pressure. On October 14, 2026, Gartner predicted that "cost pressures and a lack of differentiated business models" will force more than 80% of neocloud providers to cease independent operations by 2030. Gartner also estimates that if AI providers continue spending at current rates, over $3.5 trillion in AI infrastructure expenditures could be at risk of impairment by the end of 2030.
The credit market is also becoming strained. By October 21, 2026, CoreWeave’s unsecured debt yield had risen to approximately 15%, and the cost of credit default insurance on its bonds increased by 30% within a month. The company’s stock fell 29% in October, with a market capitalization of about $34 billion, down from a peak of around $90 billion in 2025. Nebius declined 27% over the same period, despite having significantly less net debt; IREN fell 32%.
The bullish case remains intact. CoreWeave co-founder Brannin McBee stated that the company has nearly sold out its entire 2027 capacity, with contracts extending into 2028 and beyond. Regardless of whether NeoCloud remains independent or is acquired by a larger player, demand for AI computing remains strong. The real question is whether these companies can generate enough profit to repay their debts.
Disclaimer
This article is for informational purposes only and does not constitute investment advice.
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