AI compute hosts (neoclouds)

Analysis and information

What this theme is

AI compute hosts supply the GPUs, buildings and power that AI models run on, outside the largest cloud companies' own data centers. Some rent GPU computing directly, such as CoreWeave, Nebius and IREN. Others lease powered data centers to cloud companies and AI labs on long contracts, such as Core Scientific, TeraWulf, Cipher Digital, Applied Digital and Galaxy. Several began as bitcoin miners and are converting their sites, and Microsoft is a customer of both CoreWeave and IREN.

What we're seeing

• 10-28: Microsoft's CFO said quarterly capital spending was $45.2B "as some third-party capacity deliveries we expected in Q1 were delayed." She said some "3P GPU-as-a-Service contracts" moved to the fiscal second half, which runs January to June 2027. She also said "customer demand continues to exceed available supply." She put calendar-year spending at about $170B.
• 10-28: Alphabet's Q3 capital spending was $51.4B, and Google Cloud revenue rose 103% to $30.7B. Its CFO said Google "started utilizing third-party compute capacity at the end of Q3" and expects near-term margin headwinds from it. The 2026 range of $195-205B was unchanged. The CFO said 2027 spending will "increase significantly."
• 10-28: In overnight trading after Microsoft's call, CRWV fell 5.8%, NBIS 6.3%, IREN 5.3% and APLD 4.3%.
• 10-28: IREN closed a $363M financing secured mainly by GPU servers and networking gear already earning revenue.
• 10-27: Galaxy said all 133 MW of the first phase at its Helios campus in Texas is delivered to CoreWeave. It is in talks with possible tenants for 830 MW at Helios II that is not yet leased.
• 10-27: CoreWeave set its Q3 report for 11-10. The five-year credit default swap spread on its debt was about 1,041 basis points, per Markit data reported by Crypto Briefing.
• 10-26: Nebius's CEO was reported as saying some "asset-backed financing or debt markets" had temporarily dried up. He said customer advances and other tools should fund "this gigawatt at least."
• 10-23: TeraWulf raised its revolving credit commitments to about $400M from $250M.
• 10-22: Nebius disclosed a $3.5B, 364-day senior secured bridge loan from Citibank, signed on 10-17.
• 10-21: Meta's Q3 capital spending, including finance leases, was $34.91B, and it narrowed its 2026 range to $135-145B.
• 10-21: IREN announced a planned 300 MW campus in Badajoz, Spain, with no customer named. Soluna and Applied Digital agreed to form a 50 MW joint venture in Briscoe County, Texas, where the planned tenant has signed only a non-binding letter of intent.
• 10-20: The Texas Tribune reported a 10-19 letter from the state's environmental agency to the governor. The agency said it had paused permits for infrastructure "directly supporting data centers." The governor ordered the pause on 9-21; no end date was given.
• 10-19: Bitdeer put its AI cloud revenue backlog at about $2.9B, up from $0.9B in August.
• 10-16: Cipher Digital closed $850M of 0.00% convertible notes due 2032.

What to watch

• Q3 reports: Core Scientific on 11-05 before the open; IREN on 11-05 (call at 5:00 p.m. ET); TeraWulf on 11-06 (call at 8:00 a.m. ET); CoreWeave on 11-10 (call at 5:00 p.m. ET); Nebius about 11-11 (not confirmed). Dates for Cipher Digital, Bitdeer and Applied Digital are not confirmed.
• Amazon's Q3 call on 10-29 at 5:00 p.m. ET.
• Whether the third-party GPU contracts that Microsoft delayed start in January to June 2027.
• Debt: Nebius's bridge loan is due 10-16-2027. CoreWeave's credit default swap spread was above 1,000 basis points in late October. IREN's newest loan is secured by GPU equipment.
• Texas permits, which are paused with no end date. Sites in Texas include Galaxy's Helios campus, Cipher Digital's Barber Lake, Core Scientific's Denton, Pecos and Hunt sites, and Applied Digital's planned joint venture.

The peers

• CRWV: a GPU cloud and the tenant at Core Scientific and Galaxy sites. CoreWeave page
• NBIS: an Amsterdam-based GPU cloud funded partly by customer prepayments. Nebius page
• IREN: a GPU cloud that builds its own sites and is moving out of bitcoin mining. IREN page
• WULF: a data center landlord in New York and Kentucky whose tenants include Fluidstack and Anthropic. TeraWulf page
• APLD: a data center landlord in North Dakota that leases to large cloud companies. Applied Digital page
• CORZ: a data center landlord whose main customer is CoreWeave. Core Scientific page
• CIFR: a data center landlord with three campus leases and a Texas pipeline. Cipher Digital page
• GLXY: the owner of the Helios campus in Texas, leased to CoreWeave, and also part of the crypto theme. Galaxy Digital page
• BTDR: a bitcoin miner building AI cloud sites in Malaysia, Norway and the U.S. Bitdeer page