Alternative clouds are booming as companies seek cheaper access to GPUs | TechCrunch
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The Rise of Alternative Cloud Providers for Generative AI Workloads
- CoreWeave, Lambda Labs, Voltage Park, and Together AI have raised significant funding for their cloud-based GPU infrastructure services.
- The demand for alternative clouds is driven by the need for hardware to run and train generative AI models at scale.
- GPUs are the preferred choice for generative AI workloads due to their parallel processing capabilities, but they can be expensive to install.
- Alternative cloud providers offer cheaper options for renting GPUs compared to incumbents like AWS, Google Cloud, and Microsoft Azure.
- Companies like CoreWeave provide an alternate route to market and access to GPUs, particularly for specialty GPU workloads.
- Even big tech firms have started turning to alternative cloud providers to overcome compute capacity challenges.
- Nvidia, the main supplier of GPUs to CoreWeave, is reportedly giving preferential access to some alternative cloud providers.
- Alternative cloud providers have an advantage over incumbents due to their focus on premium AI services without the infrastructure burden.
- The sustainability of alternative cloud providers' growth will depend on their ability to bring GPUs online in high volume and offer competitive pricing.
- Incumbents like Google, Microsoft, and AWS are also investing in custom hardware for running and training models, potentially challenging the pricing advantage of alternative cloud providers.
The Future of AI Clouds and the Role of Hypercalers and GPU Startups
- Hypercalers will use their custom silicon to reduce their reliance on Nvidia.
- Nvidia will seek partnerships with GPU-centric AI clouds like CoreWeave.
- Not all AI workloads require GPUs, as CPUs can also perform the necessary calculations, albeit at a slower speed.
- There is a possibility that the generative AI bubble may burst, leaving providers with excess GPUs.
Rise of Alternative Cloud Providers for GPU Infrastructure Services
- CoreWeave, Lambda Labs, Voltage Park, and Together AI have secured significant funding for their cloud-based GPU infrastructure services.
- Demand for alternative clouds is driven by the need for hardware to run and train generative AI models at scale.
- GPUs are preferred for generative AI workloads due to their parallel processing capabilities.
- Alternative cloud providers offer cheaper options for renting GPUs compared to major players like AWS, Google Cloud, and Microsoft Azure.