Surging Ai Use Accelerate Demand Neoclouds Jll
The demand for neoclouds, a new breed of cloud solutions, is expected to skyrocket as the adoption of AI continues to surge. According to research conducted by JLL, the growing demand for AI, combined with limited supply from traditional cloud providers, is driving the rise of neocloud infrastructure as an alternative to hyperscalers.
Neoclouds are cloud solutions that focus on providing 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 extensive cloud computing services for a wide range of applications, neocloud providers offer on-demand access to GPUs that are specifically optimized for demanding AI and machine learning tasks. Some of the major players in the neocloud market include CoreWeave, Nebius, and Crusoe.
One of the key advantages of neoclouds is their ability to deploy high-density GPU infrastructure quickly, as opposed to the slower buildouts typically seen in hyperscale data centers. Andrew Batson, head of data center research for the Americas at JLL, also notes that neoclouds have gained an edge over traditional cloud providers by offering lower prices and more flexible terms. “As the demand for AI continues to grow, access to GPU infrastructure will be crucial, and neoclouds cater specifically to this need,” he explains.
JLL predicts that the global neocloud segment will experience a staggering 82% compound annual growth rate between 2021 and 2025, driven by increasing competition for AI resources and GPU capacity. However, despite the rapid growth of neoclouds, JLL does not believe that this will have a negative impact on hyperscalers. “Because neoclouds specialize in AI workloads, hyperscalers will still be better equipped to offer a diverse range of computing services preferred by many large enterprises,” the firm states.
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Moreover, neoclouds require specialized infrastructure, such as high-power density and advanced cooling systems, which can result in higher capital requirements and shorter lease terms. This can increase the investment risks associated with neocloud infrastructure compared to traditional data centers.
In the end, the success of neoclouds will depend heavily on investment, according to Mohd Syafiq, director of data center research for Asia-Pacific at JLL. “Obtaining funding will be crucial in turning the potential of neoclouds into a tangible solution capable of handling the demands of AI workload,” he says.