The Rise of the Neocloud

Why Are AI Giants Renting Computers?

The current situation in the AI infrastructure boom is that you spend tens of billions of dollars building your own data centers. And also you spend tens of billions of dollars renting data centers from someone else. The someone else, it turns out, is increasingly CoreWeave.

In the past week, the specialized cloud provider has signed deals worth a potential $36 billion with two of the fiercest rivals in the AI race. First, it expanded its agreement with OpenAI to as much as $22.4 billion. Then, it announced a new deal with Meta. Here is Reuters:

CoreWeave said it has signed a $14 billion agreement with Meta to supply computing power, the latest multi-billion-dollar deal as businesses ramp up infrastructure to meet the demand for artificial intelligence applications. Shares of CoreWeave surged 12% following the news on Tuesday.

Under the agreement, Meta has committed to pay around $14.2 billion through December 14, 2031, with the option to expand through 2032 for additional cloud computing capacity, CoreWeave said in a filing.

This is the coming-out party for a new and powerful force in the tech ecosystem: the "neocloud". Unlike the giant, general-purpose hyperscalers like Amazon Web Services or Microsoft Azure, a neocloud is a specialist. Its business model is simple: cultivate a deep relationship with Nvidia, secure massive allocations of the most powerful and sought-after GPUs, and rent out access to them faster than anyone else.

On the surface, it seems paradoxical that companies like Meta, who are spending tens of billions on their own data centers, would simultaneously pay a third party billions more for a rental. The answer is a combination of speed, access, and scarcity. The demand for AI computing power is growing faster than anyone can build for it, and neoclouds are filling the gap. They have one job: to be the best and fastest at deploying Nvidia's latest hardware.

This is where the story gets a bit circular. Nvidia is a key investor in CoreWeave, and CoreWeave's primary business is buying Nvidia chips. This creates a self-reinforcing loop where Nvidia's investment helps fuel demand for its own products, raising legitimate questions about how much of the demand in the AI market is truly organic.

But the deals also reveal the sheer intensity of the AI arms race. The fact that the biggest players—OpenAI, Meta, and Microsoft's customers—are willing to sign massive, multi-billion-dollar commitments with these new providers demonstrates that access to high-end GPUs is the single biggest bottleneck to progress. CoreWeave has positioned itself as the Switzerland of the AI wars, happy to supply all sides in their fight for computational supremacy. In this new arms race, the company renting out the battlefield is one of the most profitable businesses you can be in.

Browser Wars 2.0

The basic function of a web browser, for decades, has been to display websites. It is a window to the internet. Now, a funny thing is happening: the window is starting to look back at you. This week, Opera, a veteran of the original browser wars, launched "Neon," a new AI-powered browser designed to automatically perform tasks for users.

This is not a fight over who can render pages fastest or offer the best bookmarks. The new war is about who can build the most intelligent browser, transforming it from a simple navigator into a powerful AI "agent" that can act on a user's behalf. Here is Reuters on the move:

Opera on Tuesday launched Neon, an artificial intelligence-powered browser that can execute tasks and run code inside web pages, adding to the intensifying competition among technology firms to make web browsing more agentic.

The move underscores the race to transform the browser into a productivity hub that acts on behalf of users rather than just delivering search results. Perplexity AI released its Comet browser earlier this year, while The Browser Company, the maker of Arc, launched Dia.

This is the new paradigm of "agentic browsing" that we have discussed before. Instead of searching for flights, comparing prices across three tabs, and then manually filling out a booking form, you could simply tell an agent: "Find and book me the cheapest flight to Cairo next Tuesday." The browser has become the high ground in the AI wars because it is the natural home for these agents. It holds all the context an AI needs to be truly useful: your browsing history, your logins, and what you're looking at in real-time.

This is why everyone is suddenly building an AI browser. Google is aggressively integrating Gemini into Chrome to defend its turf. OpenAI is reportedly building its own browser to house its "Operator" agent. AI-native startups like Perplexity are building browsers like "Comet" from the ground up with agentic capabilities at their core.

Opera's strategy is to make a bet on privacy. While most agents rely on powerful cloud-based models, Opera claims that Neon's key actions will occur locally on a user's machine. It's a gambit that a more secure, paid experience can win over users in an era of tightening regulatory scrutiny.

The whole thing is a fascinating replay of a classic platform war. The challenge for everyone, of course, is Google's immense incumbency. But the race is on to redefine what a browser is for. For years, the world has been trained to "search." The goal now is to retrain billions of people to "delegate."

The Scoreboard

• Software: Microsoft is bringing its Windows engineering teams back together again (The Verge)
• Software: Spotify founder Daniel Ek stepping down as CEO, company names co-CEOs to replace him (CNBC)
• Venture: AI chip company Cerebras raises $1 billion in pre-IPO funding round (CNBC)