Neocloud
A cloud provider built to rent GPU computing capacity for AI, such as CoreWeave, Nebius, Nscale, Lambda, Crusoe and Fluidstack.
How it works
A neocloud sells access to GPU computing power, usually by the hour or under multi-year capacity contracts, rather than the broad menu of storage, databases and software a traditional cloud offers. Most were founded or repurposed after 2020 to meet demand for AI training and inference, and many began as crypto miners or GPU resellers. Their business is capital heavy: the GPUs, networking and data centre capacity are bought or leased up front, and revenue arrives over the life of the customer contracts.
In GPU and data centre deals
For lenders, a neocloud is credit analysed through its contracts. The largest neocloud financings are sized on contracted cash flows from investment-grade customers such as hyperscalers and AI labs, with the GPUs, the customer contracts and the bank accounts held in a ring-fenced borrower. Neoclouds also raise convertible notes, high yield bonds and vendor finance at group level, so the capital structure often has several layers that sit differently against the same assets.
What gets negotiated
- How much of the debt is backed by contracts with investment-grade customers, and for how long
- Whether the GPUs and contracts sit in a ring-fenced SPV or at group level
- Parent support: full guarantee, limited guarantee or bad-acts guarantee only
- What happens to the debt when a customer contract ends before the loan is repaid
For in-house counsel
Neocloud in the filed documents
Where the term turns up in filed contracts and what is market, for the lender’s or the borrower’s side. Previews are open; the full text is free with InfraCompute Weekly.
- What’s market: Hyperscaler lease backstop (recognition agreement)What does a hyperscaler backstop of a neocloud lease actually commit to?
- Contract library: A GPU supplier guarantees the rentWho stands behind a neocloud’s data centre rent, and can a chip supplier be the guarantor?
- Contract library: The anchor customer steps into the leaseIf a neocloud tenant becomes insolvent, can its customer take over the data centre lease?
- The legal desk for in-house counselContract library, issues lists, checklists and English law notes.
Related terms
Explanatory definition, not a statement that a particular transaction contains this term or a substitute for its contractual definition.
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