The listed neocloud company provides computing power leasing services for AI, and its stock price has dropped to a 12-month low; meanwhile, Elon Musk is raising $40 billion in debt to purchase computing power and predicts that "over 200 neocloud companies will face small-scale death and consolidation." Against this backdrop, announcing a round of neocloud Series A financing is not ideal timing.
However, General Compute, co-founder and CEO Finn Puklowski, doesn't care about that. He is optimistic about the prospects of CoreWeave and believes that Musk is just "voicing his position" in order to drive down the price of GPU that he wants to buy. He dismisses concerns about a chip-driven collapse, stating that such worries are "severely exaggerated." He receives calls every week asking him to provide TPU, GPU; any chip will do as long as it can give them more computing power.
Equally important, he stated that the Anthropic optimistic S-1 document “temporarily alleviated market concerns.”
The niche market identified by General Compute revolves around the dedicated inference chips launched by NVIDIA's competitors, and they use these chips to build their own cloud services. The company reached a $400 million agreement with SambaNova to purchase new chips, which marked the first debt financing for inference chips. Subsequently, they added Positron and Cerebras to their list of chip suppliers.
A transaction from a major client, with an annual recurring revenue of $100 million, paved the way for the company to raise $100 million in Series A financing. This round was led by Blackbird Ventures and Abstract Ventures. After its seed round in May, General Compute was valued at $60 million, and now its post-investment value is $800 million for investors.
The strategy of this startup is to “go left when others go right.” While others are chasing GPU, it focuses on developing chips designed for inference; instead of investing in complex engineering to build large data centers, it uses smaller power sources, rents data center space from other companies, and transforms existing Bitcoin mining facilities into places to run AI models.
This means that General Compute will not quickly rise to become the leading player among neocloud, nor will it compete head-on with super-large-scale cloud service providers. However, this also means that it does not have to be constrained by the challenges of building a data center from scratch. As long as it obtains the necessary chips, General Compute will always be able to find a place to connect to electricity. Puklowski expects the company to deploy 75 megawatts of computing power by 2027 and believes it may be able to obtain 200 megawatts of electricity – “which could be more than what we can afford to fund and purchase in hardware.”
However, this plan also has its limits. Puklowski said that the fundraising efforts are not yet over – “For me, raising capital will become a full-time job, whether it’s through debt financing or equity financing,” he told TechCrunch.
This startup has already found key customers among the cloud companies that specialize in providing high-speed inference services for developers; General Compute provides them with bare metal, which are raw servers without any software layers on top, helping them to bring their products to market. James Palmer, a partner who co-led the investment, stated that the company's confidence in General Compute partly stems from its investment in the inference cloud company Baseten.
Palmer to TechCrunch states: 'Over the past 10 months, we have been keeping in close alignment with their growth trajectory, and we have also observed the explosive growth of Baseten, as well as the demand for open-source weight inference and the company's own intelligence.' When talking about General Compute, he said: ' Cerebras, Positron, and SambaNova all need distribution partners that can help them achieve scalability and cope with the complexities of the real world.'
Executives from these three chip manufacturers all expressed their appreciation for General Compute to TechCrunch, and each pointed out the importance of their companies focusing on establishing the cloud computing power economy model of AI. SambaNova's CEO and co-founder, Rodrigo Liang, stated: "Everyone in this market is selling speed. The real question is, can you make money from it?"
