Surging Ai Use Accelerate Demand Neoclouds Jll
The demand for neoclouds, a new category of cloud solutions, is expected to skyrocket as the adoption of artificial intelligence (AI) continues to surge. This is according to recent research by JLL, which suggests that the ever-increasing demand for AI, coupled with limited supply from traditional cloud providers, is driving the rise of neocloud infrastructure as an alternative to hyperscalers.
Neoclouds are cloud solutions designed to provide 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 broad cloud computing services for various uses, neocloud providers specialize in offering flexible, on-demand access to GPUs optimized for demanding AI and machine learning workloads. Some major neocloud providers include CoreWeave, Nebius, and Crusoe.
One major advantage of neoclouds is their ability to deploy high-density GPU infrastructure in a shorter period compared to the multi-year builds that are common in hyperscale data centers. According to Andrew Batson, head of data center research for the Americas at JLL, neoclouds have also gained an advantage over traditional cloud providers by offering lower prices and more flexible terms. “As AI continues to grow, its success will depend on access to GPU infrastructure, which is precisely what neoclouds offer,” he adds.
The research by JLL suggests that the global neocloud segment is expected to grow at a staggering 82% compound annual growth rate between 2021 and 2025, driven by the intense competition for AI capacity and GPU resources.
Despite the rapid growth of neoclouds, JLL does not predict any negative impact on hyperscalers. The firm believes that due to their specialization in AI workloads, hyperscalers will still be better positioned to provide a wide range of computing services, which is preferred by many global enterprises.
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In addition, neoclouds require specialized infrastructure, including high power density and advanced cooling systems. This has resulted in higher capital requirements and shorter lease terms, making neocloud infrastructures riskier investments compared to traditional data centers.
Ultimately, the success of neoclouds will depend heavily on investments, says Mohd Syafiq, director of data center research for Asia Pacific at JLL. “Securing funding will be crucial in turning the potential of neoclouds into a reality that can effectively handle the demands of AI,” he explains.