Surging Ai Use Accelerate Demand Neoclouds Jll
There is a growing demand for neoclouds, a new type of cloud solution, in the face of increasingly widespread adoption of artificial intelligence (AI). As per JLL’s research, the insatiable appetite for AI and limited supply from traditional cloud providers has led to a rise in neocloud infrastructure as an alternative to hyperscalers.
Neoclouds are cloud solutions that focus on delivering high-performance graphics processing units (GPUs), also known as GPU-as-a-service (GPUaaS). Unlike traditional hyperscale providers like Amazon Web Services, Microsoft Azure, and Google Cloud, which offer large-scale cloud computing services for a wide range of use cases, neocloud providers offer flexible, on-demand access to GPUs specifically optimized for demanding AI and machine learning workloads. Some of the major neocloud providers include CoreWeave, Nebius, and Crusoe.
According to JLL, one major advantage of neoclouds is their capability to deploy high-density GPU infrastructure quickly, unlike the multi-year builds commonly seen in hyperscale data centers. Andrew Batson, head of data center research for the Americas at JLL, notes that neoclouds have an edge over traditional cloud providers by offering lower prices and more flexible terms. He further adds that as AI continues to thrive, accessibility to GPU infrastructure, which neoclouds specialize in, will play a crucial role in its success.
JLL’s estimates show that the global neocloud segment experienced an 82% compound annual growth rate between 2021 and 2025, owing to the growing competition for AI capacity and GPU resources. Despite the rise of neoclouds, JLL does not anticipate any adverse impact on hyperscalers. The firm believes that hyperscalers’ specialization in AI workloads makes them better equipped to provide a diverse range of computing services, which is preferred by many global enterprises.
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Moreover, neoclouds require specialized infrastructure, including high power density and advanced cooling systems, which translates into higher capital requirements and shorter lease terms. This increases the investment risk for neocloud infrastructure as compared to traditional data centers.
Ultimately, the success of neoclouds will depend on significant investments, says Mohd Syafiq, director of data center research for Asia Pacific at JLL. He emphasizes that funding will be a crucial factor in turning the potential of neoclouds into a reality that can handle the increasing AI load.