WSS: Growth acceleration continues across ecosystem as AMD looks to build out delivery channel
The past week saw earnings season continue, with results coming from the neocloud, webscale and managed infrastructure segments. CoreWeave, Rackspace and DigitalOcean reported in the last several days, and this followed Cloudflare, Fastly and Akamai in the previous week. We are still sorting through the results, but took a closer look at Akamai’s earnings report. Akamai’s cloud infrastructure arm showed strong momentum and growth acceleration as organizations add adopt raw compute infrastructure as part of a wider plan to adopt AI services and solutions. The early returns from CoreWeave and DigitalOcean point to some growth acceleration as well, reflecting where the momentum across the ecosystem is headed (we will have more details next week). There were also results coming from energy companies that provide data points and signals for where demand is headed. In the past week, we looked at Duke Energy’s results, which revealed some interesting and useful data points about data centre and hyperscale demand in the southeast region.
Hyperscale cloud infrastructure growth is driving the sector, but it is the AI platforms like OpenAI that are consuming cloud and data centre infrastructure taking uplift and growth acceleration to new levels. There was reporting in the past week about OpenAI raising its growth projections again. And this is, not surprisingly, contributing to more infrastructure procurement and consumption. OpenAI is now expecting to generate 27% more revenue in the next five years than had been projected quite recently. We also recently came across some useful data points about OpenAI’s rate of monetization of its compute capacity.
AI is of course, consuming plenty of GPUs and Meta is doubling down on its partnership with silicon vendors. It recently reiterated its commitment to NVIDIA and in the past week revealed an enhanced partnership with AMD as it looks to deploy multi-gigawatt levels of infrastructure capacity built on AMD’s technology. This is not just a supplier relationship, but a collaborative partnership on the technology front. We also have some details on how the deal, and deals similar to this one, could result in data centre colocation consumption. The deal underscores the emphasis AMD is placing on building out a service provider delivery ecosystem. It is here where it is far less developed than NVIDIA, but it is making strides. In the past week, there were reports suggesting that AMD was set to backstop a deal with neocloud operator Crusoe to procure $300m worth of AMD GPUs for deployment in Ohio.
The past week was also notable for the number of developments coming out of India. STT GDC expanded in Chennai, while Adani committed $100b to build India’s AI infrastructure and new entrant Neysa, backed by Blackstone, is set to enter the cloud infrastructure market. There was recently an AI summit in India and we take a look at some of the announcements, which included a new project for OpenAI.
It was a shorter month, but no shortage of happenings across the sector. We took a closer look at some of the more noteworthy themes, which where touched on above around hyperscale and webscale growth acceleration and AI platform revenue increases, but also included tracking and analysis of M&A developments, neocloud consumption of data centres and cloud infrastructure, and ongoing evolution in the data centre colocation business model.
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