AI Cloud Providers Rely on Expensive Nvidia Chips to Remain Competitive
CoreWeave CEO Michael Intrator revealed that “neocloud” firms like his are deeply dependent on the sustained high costs of Nvidia’s AI chips to stay viable. In an interview with Bloomberg, he acknowledged the risk: if chip prices fall or availability improves, traditional cloud giants like AWS and Azure would outcompete smaller, specialized firms. These neocloud companies invest heavily in Nvidia GPUs and lease them to AI startups and enterprises, profiting from today’s supply constraints.
The dependence on Nvidia’s pricing power exposes a structural fragility in the booming AI infrastructure market—long-term viability may hinge on external factors.
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