Surging Ai Use Accelerate Demand Neoclouds Jll
The demand for neoclouds, a new class of cloud solutions, is expected to soar as the adoption of AI continues to rapidly increase. Research conducted by JLL reveals that the growing demand for AI, coupled with limited supply from traditional cloud providers, is leading to a rise in neocloud infrastructure as an alternative to hyperscale providers.
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Neoclouds are cloud solutions that focus on delivering high-performance graphics processing units (GPUs) or GPU-as-a-service (GPUaaS). Unlike traditional hyperscalers like Amazon Web Services, Microsoft Azure, and Google Cloud, neocloud providers offer on-demand access to GPUs that are specifically optimized for demanding AI and machine learning workloads. Some major neocloud providers include CoreWeave, Nebius, and Crusoe.
One of the main advantages of neoclouds is their ability to deploy high-density GPU infrastructure. This sets them apart from hyperscale data centers, which often take years to build. According to Andrew Batson, head of data center research for the Americas at JLL, neoclouds also have an advantage over traditional cloud providers in terms of pricing and flexible terms. As the demand for AI continues to rise, neoclouds play a crucial role in providing easy access to GPU infrastructure.
JLL’s research predicts that the global neocloud segment will experience a massive 82% compound annual growth rate between 2021 and 2025, thanks to the increasing competition for AI capacity and GPU resources.
However, JLL does not anticipate this growth to negatively impact hyperscale providers. This is because hyperscalers are better equipped to offer a wide range of computing services, which is preferred by many global enterprises. In contrast, neoclouds specialize in AI workloads.
Furthermore, neoclouds require specialized infrastructure, including high-power density and advanced cooling systems. This results in higher capital and investment risks compared to traditional data centers.
To achieve its full potential, the growth of neoclouds will heavily rely on investments, says Mohd Syafiq, director of data center research for Asia Pacific at JLL. “Funding will play a crucial role in turning the potential of neoclouds into a reality capable of handling the AI load.”