Neoclouds Race for the Public Markets, Leaving VCs Behind

Frantic deal-making & debt financing spur debate over AI infrastructure startups

With neoclouds either already public (CoreWeave) or reportedly racing to do so (Lambda), these infrastructure-heavy AI cloud providers have become some of the biggest markups in the AI boom. And many top venture capital firms have largely missed out.

The rush to the public markets is unusual in the current tech era. Skeptical VCs snark that the neoclouds — essentially a new class of AI data center builders and resellers of AI chip clusters — are not really technology companies at all. Rather they’re real-estate and power-market plays wrapped in an AI story, with a boost from sweetheart relationships with Nvidia and other chipmakers.

Yet, as one AI-startup executive put it bluntly: “VCs are massively regretting not investing.”

Consider the action in the space just over past week weeks: