Within the examine, JLL identifies round 190 “distinct operators” past established neoclouds resembling CoreWeave, Nebius, and Crusoe
In sum – what to know:
82% CAGR since 2021 – Neoclouds are quickly increasing income as AI GPU demand accelerates, with almost 200 operators getting into the market.
Versatile deployments beat hyperscalers – Location alternative and decrease prices make neoclouds extra aggressive, providing a 6.6% discount in bills in comparison with conventional hyperscalers.
Excessive development, increased dangers – Shorter contracts, expensive power-dense websites, and capital-heavy builds heighten funding dangers, requiring cautious enterprise fashions and robust shopper backing.
The so-called ‘neocloud’ sector has recorded a compound annual income development charge of 82% since 2021, in keeping with a brand new report by JLL.
The examine, The Rise of Neocloud Infrastructure, highlights how intensifying competitors for AI capability and entry to GPU assets is fueling fast enlargement. JLL identifies round 190 “distinct operators” past established neoclouds resembling CoreWeave, Nebius, and Crusoe.
The JLL report famous that current developments embrace S&P World reporting greater than $10 billion invested within the sector final yr, underscoring momentum. JLL additionally pointed to CoreWeave’s inventory worth almost tripling since its March IPO.
One of many major benefits for neoclouds is flexibility, in keeping with JLL. In contrast to hyperscalers tied to conventional hubs, these corporations can choose websites with “optimum energy assets and price advantages,” making deployments quicker and extra cost-efficient. Uptime Institute evaluation cited by JLL estimates neoclouds can ship round a 6.6% value discount in comparison with hyperscalers.
The report additionally highlighted that complete capability assessments and utility negotiation experience have turn out to be essential elements of a profitable facility planning on this sector.
“Demand for AI infrastructure is rising at an distinctive tempo, and the worldwide information heart market has turn out to be capability constrained. Neoclouds have developed a bonus over conventional cloud suppliers by transferring quicker and pricing decrease with versatile phrases. As AI reveals no indicators of slowing, its success will depend on accessibility to GPU infrastructure, which neoclouds particularly cater to,” stated Andrew Batson, head of knowledge heart analysis for the Americas at JLL.
Nonetheless, the report additionally underlined dangers. Neocloud GPU contracts usually vary from two to 5 years—shorter than the seven to 9 years typical for asset payback durations—creating what JLL described as a “vital mismatch.” Rental prices are additional pressured by demand for scarce high-power websites with superior networking and density capabilities, intensifying competitors amongst suppliers, in keeping with JLL.
“Funding will likely be a significant factor to translate the potential of neoclouds right into a actuality able to dealing with the AI load. Constructing GPU infrastructure is capital-heavy, and buyers ought to have a transparent imaginative and prescient for delivering a viable enterprise mannequin and help from key shoppers earlier than endeavor an entry into the neocloud house,” stated Muhd Syafiq, director of knowledge heart analysis, Asia Pacific, JLL.
The North American information heart sector is dealing with a deepening provide crunch as emptiness charges hit file lows regardless of a surge in new growth, in keeping with the earlier JLL’s midyear 2025 North America information heart report.
The agency warns the market has reached a “vital tipping level,” the place hovering demand, restricted energy, and prolonged construct timelines are forcing operators and enterprises to rethink methods.
