In short

• Neocloud are specialized cloud service providers, such as CoreWeave and Nebius. They rent Nvidia GPU clusters to AI laboratories, startups, and large technology companies.
• Many companies have a background in encryption: CoreWeave initially engaged in Ethereum mining, while Bitcoin miners have signed multi-billion-dollar AI hosting agreements with Microsoft, Amazon, and Anthropic.
• Gartner predicts that by 2030, over 80% of suppliers will no longer operate independently. In October 2026, neocloud stocks were consequently sold off.

Training and running modern AI models requires tremendous computing power, of which almost all comes from graphics processors ( GPU ). For the past decade, renting servers has mostly meant turning to one of the three major “ultra-large cloud providers”: Amazon Web Services, Microsoft Azure, or Google Cloud. With the boom in ChatGPT triggering a competition for GPU, a new type of company began to emerge to meet this demand, and these are neocloud.

Neocloud is a specialized cloud service provider that focuses on one thing only: training and renting out GPU computing power for AI. "Inference" refers to the process of running trained models to answer requests. They have grown from obscure startups into listed companies with contracts worth billions of dollars, and they have a deep connection with the cryptocurrency industry. CoreWeave originated as Ethereum miners, and now a wave of Bitcoin miners are converting their power-consuming facilities into AI data centers.

This guide introduces what neocloud are, how they operate, who the main participants are, and why their stock prices plummeted significantly in October 2026.

What is neocloud?

Neocloud is an Infrastructure as a Service (IaaS) provider for AI. Super-large cloud vendors offer hundreds of services, ranging from databases to email hosting; whereas neocloud mainly sells the rights to use large, high-end GPU clusters, as well as the network, storage, and software required to run AI workloads on these clusters. CNBC describes them as enterprises that "provide GPU access to support artificial intelligence in the form of services."

The most well-known neocloud include:

• CoreWeave (Nasdaq ticker: CRWV): Supported by Nvidia, it is the largest pure neocloud. The company went public in March 2025.
• Nebius Group (Nasdaq ticker: NBIS): Headquartered in Amsterdam, it was spun off from the international operations of the Russian technology giant Yandex.
• Lambda, Crusoe, and Fluidstack: Private shareholders of the GPU cloud service provider, however, Lambda is currently conducting the final round of financing for the planned IPO.
• IREN: A AI custodian that transformed from a Bitcoin miner, now operating its own AI cloud.

Neocloud is a company, not a blockchain, therefore they do not issue native tokens. Their stocks are traded on traditional stock exchanges.

Do you know?

CoreWeave started using GPU to mine Ethereum in 2017. After Ethereum switched to Proof of Stake in 2022, mining on the network by GPU came to an end, and CoreWeave then shifted its hardware to AI and cloud services.

How does neocloud work?

Neocloud The model boils down to three scarce resources: chips, electricity, and capital.

• Chip. Neocloud will purchase a large quantity of Nvidia GPU and network them into clusters designed specifically for AI. The ability to get access to the new generation of Nvidia system first is a major selling point.
• Electricity and space. AI These clusters require hundreds of megawatts of power as well as liquid cooling. Neocloud One option is to build a data center in-house, or to rent a "powered enclosure" from a site provider, which includes Bitcoin miners that are transitioning to become AI hosting providers.
• Capital. GPU is very expensive, and its value depreciates quickly. Neocloud It is usually financed through debt, with the debt often secured by the chips themselves as well as long-term customer contracts.

AI Customers such as laboratories, large technology companies, and startups sign multi-year agreements to reserve computing power, or pay on an hourly basis as needed. The revenue of Neocloud comes from the difference between the income generated by GPU and the costs of purchase, power supply, and financing.

The weak point lies in depreciation. In the financial report for the second quarter of 2026, CoreWeave reported depreciation and amortization of nearly $1.4 billion, while revenue was about $2.6 billion; Nebius had depreciation and amortization of about $260 million, with revenue at $582 million.

What's so special about neocloud?

The competitive advantages of Neocloud lie in speed and focus. Ultra-large cloud providers tend to allocate GPU to a variety of services, including their own AI products; whereas Neocloud can deliver large, dedicated clusters more quickly, and its software tuning is more geared towards AI rather than general-purpose computing. Among its largest customers, some are also ultra-large cloud providers themselves. When their own data centers cannot meet the demand, these companies also rent neocloud computing power.

This industry has also provided a second chance for Bitcoin miners. According to data from Bernstein, in the two years up to July 2026, miners signed agreements for approximately 7 gigawatts of power capacity through 19 transactions, with counterparts including large-scale cloud providers, neocloud, and chip manufacturers, totaling over $135 billion in value. This is still less than a quarter of the 30 gigawatts of power infrastructure that miners had planned to acquire. The truly important asset is electricity: miners already possess land, access to power grids, and necessary permits, which usually take several years to obtain.

Do you know?

TeraWulf and Anthropic have signed a 20-year lease agreement regarding their Kentucky campus. This transaction is expected to generate approximately $19 billion in revenue, which exceeds the total market value of TeraWulf at that time.

Who is cooperating with neocloud?

• Microsoft: One of the important buyers of neocloud computing power, which includes a $9.7 billion, five-year GPU cloud contract signed with IREN.
• Amazon Web Services has signed a 15-year lease worth approximately $5.5 billion with AI, a custodian that originated from Bitcoin miners, for the use of AI computing power.
• Google: Provides guarantee for the lease payments of Fluidstack on the websites operated by TeraWulf and Cipher.
• Anthropic: This AI laboratory rents computing power from TeraWulf, and also rents 8 units of computing power from Hut through Fluidstack.
• Nvidia is the main chip supplier for neocloud, and also an investor in CoreWeave.

Is there a neocloud token?

No. Neocloud is a traditional company. The closest equivalent in the crypto world would be decentralized physical infrastructure networks (DePIN), such as Render, Akash, and io.net. These projects use tokens to pay for computing resources (GPU) and reward those who provide computational power. They target the same market, but they adopt a peer-to-peer model instead of using a company-owned data center.

Where can I buy neocloud stocks?

CoreWeave, Nebius, and IREN (IREN) are all traded on NASDAQ and can be bought and sold through mainstream brokerage firms. Several other listed AI custodians that have transformed from Bitcoin miners, including TeraWulf, Cipher, Hut, and Core Scientific, also allow investors to access AI custody services. Compute power tokens that originated in the crypto ecosystem, such as Render (RENDER), are traded on major exchanges. All of these assets should be considered high-risk, high-volatility assets.

The Future of neocloud

The industry is facing tremendous pressure. On October 14, 2026, Gartner predicted that "cost pressures and a lack of differentiated business models" will force more than 80% of neocloud suppliers to cease independent operations by 2030. Gartner also estimated that if AI suppliers continue to spend at the current rate, over $3.5 trillion in AI infrastructure expenditures could be at risk of impairment by the end of 2030.

The credit market has also become tense. As of October 21, 2026, the yield on CoreWeave's unsecured debt was around 15%, and the cost of bond default insurance for this company rose by 30% within a month. The company's stock price fell by 29% in October, with a market value of approximately $34 billion, compared to a peak of around $90 billion in 2025. Nebius's stock price also fell by 27% during the same period, although its net debt is much lower; IREN's stock price dropped by 32%.

The reasons for being bullish still exist. CoreWeave, co-founder Brannin McBee, stated that the company has almost sold out all of its production capacity for 2027, and the contracts extend into 2028 and beyond. Whether neocloud ultimately remains independent or is acquired by a larger player, the demand calculated for AI is still very high. The real question is whether these companies will be able to earn enough money from it to repay their debts.

Disclaimer

This article is for informational purposes only and does not constitute investment advice.

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