In the study, JLL identifies around 190 “distinct operators” beyond established neoclouds such as CoreWeave, Nebius, and Crusoe
In sum – what to know:
82% CAGR since 2021 – Neoclouds are rapidly expanding revenue as AI GPU demand accelerates, with nearly 200 operators entering the market.
Flexible deployments beat hyperscalers – Location choice and lower costs make neoclouds more competitive, offering a 6.6% reduction in expenses compared to traditional hyperscalers.
High growth, higher risks – Shorter contracts, costly power-dense sites, and capital-heavy builds heighten investment risks, requiring careful business models and strong client backing.
The so-called ‘neocloud’ sector has recorded a compound annual revenue growth rate of 82% since 2021, according to a new report by JLL.
The study, The Rise of Neocloud Infrastructure, highlights how intensifying competition for AI capacity and access to GPU resources is fueling rapid expansion. JLL identifies around 190 “distinct operators” beyond established neoclouds such as CoreWeave, Nebius, and Crusoe.
The JLL report noted that recent developments include S&P Global reporting more than $10 billion invested in the sector last year, underscoring momentum. JLL also pointed to CoreWeave’s stock price nearly tripling since its March IPO.
One of the main advantages for neoclouds is flexibility, according to JLL. Unlike hyperscalers tied to traditional hubs, these firms can select sites with “optimal power resources and cost benefits,” making deployments faster and more cost-efficient. Uptime Institute analysis cited by JLL estimates neoclouds can deliver around a 6.6% cost reduction compared to hyperscalers.
The report also highlighted that comprehensive capacity assessments and utility negotiation expertise have become crucial components of a successful facility planning in this sector.
“Demand for AI infrastructure is growing at an exceptional pace, and the global data center market has become capacity constrained. Neoclouds have developed an advantage over traditional cloud providers by moving faster and pricing lower with flexible terms. As AI shows no signs of slowing, its success will rely on accessibility to GPU infrastructure, which neoclouds specifically cater to,” said Andrew Batson, head of data center research for the Americas at JLL.
However, the report also underlined risks. Neocloud GPU contracts generally range from two to five years—shorter than the seven to nine years typical for asset payback periods—creating what JLL described as a “critical mismatch.” Rental costs are further pressured by demand for scarce high-power sites with advanced networking and density capabilities, intensifying competition among providers, according to JLL.
“Funding will be a major factor to translate the potential of neoclouds into a reality capable of handling the AI load. Building GPU infrastructure is capital-heavy, and investors should have a clear vision for delivering a viable business model and support from key clients before undertaking an entry into the neocloud space,” said Muhd Syafiq, director of data center research, Asia Pacific, JLL.
The North American data center sector is facing a deepening supply crunch as vacancy rates hit record lows despite a surge in new development, according to the previous JLL’s midyear 2025 North America data center report.
The firm warns the market has reached a “critical tipping point,” where soaring demand, limited power, and lengthy build timelines are forcing operators and enterprises to rethink strategies.
