u/No-Box-5282

We all are aware of Meta’s statement yesterday, saying that they would go hard into the cloud business. This means that Meta sees a greater ROI in adopting the neocloud business with their excess infrastructure rather than using it internally for their own frontier models. This is critical to our buddies at Iren because their pricing power could be diminished, creating hesitation around its future returns as competition increases. The main threat that I see is this conversion of high-quality clients into competitors. If Meta becamos a direct competitor, who is going to pay for IREN's DC?

I am holding still right now. I want to see what happens.

What layer of AI will see the biggest upside from this point onwards?

1. GPU designers

2. Memory providers

3. Switchgear

4. Cooling providers

5. Neoclouds

6. Energy providers

7. Hyperscalers

8. AI labs (OpenAI, Anthropic)

My take but please lets debate: energy providers and the whole industry behind chip manufacturing (ASML, TSMC) are the safest bets.

Let me know what you think!

I am sure that neoclouds will benefit in the short term from their early access to compute and the urgency of big tech players and AI labs to train their frontier models to remain competitive. Especially taking into consideration how long the time to power takes in a greenfield DC project.

However, in an industry where the client has the deepest pockets in the world and does not depend on the credit markets to fund their growth (excl. Open AI and Anthropic, as their cash cow is also a money furnace), I am hesitant to assure if neoclouds will have a big role in the future, as I think that neocloud clients can vertically integrate easily, especially knowing what is at stake for them.

In a bear scenario (AI returns are lower than expected and the CAPEX flow is halted), I am not sure what will happen to neoclouds, as their only role is to be the middleman between power, chips and models.