What a Neocloud Is
A neocloud is a single-product business: it rents accelerated computing, and little else. It owns the servers like a hyperscaler and chases power like a landlord, so it carries technology risk and real estate risk on one balance sheet. The category appeared because Nvidia chips were scarce, mining operators knew how to deploy hardware quickly, and a few very large buyers would sign long commitments. Faraday's read: the names will change within a few years; the four-part shape of contract, chips, power and financing will not. Learn the shape and each new operator becomes a variation on it.
Knowledge check
How does a neocloud's risk profile differ from that of a colocation landlord such as Equinix?
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A colocation landlord sells space, power and cooling while tenants own and operate their own servers, so the landlord's main asset is the building and its power. A neocloud also owns the fast-depreciating chips inside the building and sells them as a service. It therefore carries technology obsolescence risk on top of the site and power risk a landlord carries.