The Circuit EP 136: WE DON'T HAVE THE POWER!
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Oct 6, 2025 Ben and Jay dive into the world of hyperscalers and Neo clouds, discussing how power contracts have become crucial in the AI landscape. They trace the shift from Bitcoin mining to AI infrastructure, highlighting the storage challenges that come with it. The implications of OpenAI's new app Sora raise concerns about privacy and storage demands. With power scarcity becoming a bottleneck for tech expansion, the duo explores how hyperscalers may treat neoclouds as real estate investments. Their insights paint a vivid picture of the future of AI and infrastructure.
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Hyperscaler Versus Neocloud Defined
- Hyperscalers are large operators of multi-site data centers offering a full stack of services including CPUs and management software.
- Neoclouds focus heavily on GPU-based AI workloads and often lack the full platform software of hyperscalers.
Software Stack Distinguishes Scale
- A true hyperscaler provides the software stack and management layers for third parties to run all workloads securely.
- Neoclouds often provide bare metal and specialized AI services but lack hyperscaler breadth and enterprise middleware.
Bitcoin Miners Seeded Neoclouds
- Many neoclouds began as Bitcoin miners and pivoted to AI because they already had power, land, and shells.
- Those power contracts became the scarce, monetizable asset enabling rapid repurpose to AI infrastructure.