Gartner predicts that more than 80% of neocloud vendors will cease independent operations before 2030

Oct 26

1. 10:58

   East Money

   Musk and other Silicon Valley figures talk down new cloud providers, with idle compute and tightening financing in focus

   In a reply to investor Chamath Palihapitiya on a social platform, Musk said that over the past few weeks the debt market has almost cut off financing channels for new cloud providers whose revenue depends entirely on AI data centers, and that more than 200 new clouds will face death and consolidation. Palihapitiya expects that by 2027 there will be more stranded compute and inventory computing resources than currently forecast, and Musk said many compute resources will be seen sitting idle in data centers that are not yet fully built. Gartner forecasts that by 2030 more than 80% of new cloud service providers will be forced to end independent operations, and that AI data centers need to generate $8.5 trillion in revenue to cover costs while actual projections are only $3.6 trillion; Jensen Huang, meanwhile, said demand from new clouds is off the charts but they lack working capital.

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2. 10:56

   Cailian Press

   Musk and other Silicon Valley figures talk down new cloud providers, with idle compute and tightening financing in focus

   In a social media reply to investor Palihapitiya, Musk said the debt market has almost cut off financing channels for new cloud providers whose revenue depends entirely on AI data centers, and that more than 200 new clouds will face small-fish-like death and consolidation. Palihapitiya said that in 2027 there will be more stranded compute and inventory computing resources than currently forecast, and Musk agreed that a lot of compute will sit idle in data centers that are not fully built out. Gartner predicts that by 2030 more than 80% of new cloud service providers will be forced to cease independent operations, and that AI data centers will need to generate $8.5 trillion in revenue to cover costs, while actual revenue is projected at only $3.6 trillion; Jensen Huang, meanwhile, said at the GTC conference in Berlin that market demand for new cloud companies is off the charts, but funding shortages are hindering growth.

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3. 04:54

   Rohan Paul

   Gartner predicts that by 2030, over 80% of neocloud vendors will cease independent operations

   Gartner predicts that cost pressures will force more than 80% of neocloud vendors to cease independent operations before 2030, while hyperscale cloud providers face relatively lower risk due to diversified revenue. Gartner also expects AI-optimized IaaS spending to grow from $66 billion in 2027 to $174 billion in 2030, a growth rate insufficient for most AI compute vendors to recoup their investments before existing AI chips are replaced. On the current trajectory, AI data center owners will need to accumulate $8.5 trillion in revenue by 2030 to cover announced capital expenditures, financing costs, and a 12% return on investment, while Gartner expects attributable AI revenue to not exceed $3.6 trillion, with more than $4 trillion in asset value potentially at risk of impairment by 2032.

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