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Every day, GPU cloud providers face a devil’s bargain.
To secure debt, neoclouds pay for financing twice: first in interest to their lenders, and again in massive discounts to long-term contract customers.
Has giving away on-demand upside been worth it over the H100’s lifetime? lyzes 850 days of GPU pricing data to find out: ornncompute.substack.com/p/the-compute-…
To secure debt, neoclouds pay for financing twice: first in interest to their lenders, and again in massive discounts to long-term contract customers.
Has giving away on-demand upside been worth it over the H100’s lifetime? lyzes 850 days of GPU pricing data to find out: ornncompute.substack.com/p/the-compute-…
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Cloud providers sell long-term contracts to lock-in revenue. How much does that certainty cost?
We analyzed 850 days of H100 pricing, comparing two options: sell on demand or lock in a one-year contract at 40% below the current on-demand price.
Selling on demand earned more in eriods examined.
For providers, locking in long-term commitments comes at a steep cost.
Read the research: ornncompute.substack.com/p/the-compute-…
We analyzed 850 days of H100 pricing, comparing two options: sell on demand or lock in a one-year contract at 40% below the current on-demand price.
Selling on demand earned more in eriods examined.
For providers, locking in long-term commitments comes at a steep cost.
Read the research: ornncompute.substack.com/p/the-compute-…
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Prices down, usage way up.
Demand for compute is outrunning falling prices.
Great to see Ornn data featured by @a16z and @Cointelegraph.
Demand for compute is outrunning falling prices.
Great to see Ornn data featured by @a16z and @Cointelegraph.
🤖 JUST IN: AI token spending has surged 122%–160% since May despite prices falling 67%, according to a16z.
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A 5-year H100 contract is priced at $1.58/hr. On demand, that same GPU rents for $3.12/hr.
Neoclouds are accepting a ~50% discount to secure financing for their clusters. This is what we call the compute certainty tax.
How much upside have neoclouds sacrificed over the H100s esearch on the cost of certainty over the first three years of the AI buildout: ornncompute.substack.com/p/the-compute-…
Neoclouds are accepting a ~50% discount to secure financing for their clusters. This is what we call the compute certainty tax.
How much upside have neoclouds sacrificed over the H100s esearch on the cost of certainty over the first three years of the AI buildout: ornncompute.substack.com/p/the-compute-…
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Since mid-July, token prices are down 58% while B300 rental rates are up 106%.
@a16z calls it the "Rack Spread." Hedging turns volatile compute into a cost you can plan around.
Analysis using Ornn data.
@a16z calls it the "Rack Spread." Hedging turns volatile compute into a cost you can plan around.
Analysis using Ornn data.
The "Rack Spread" is unfolding, token prices are falling while GPU prices climb
Change since mid-July:
- B300 GPU rentals up 106%
- B200 up 66%
- H100 up 17%
- Average token prices down 58%
Charts of the Week: a16z.news/p/charts-of-th…
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Ornn retweeted
The "Rack Spread" is unfolding, token prices are falling while GPU prices climb
Change since mid-July:
- B300 GPU rentals up 106%
- B200 up 66%
- H100 up 17%
- Average token prices down 58%
Charts of the Week: a16z.news/p/charts-of-th…
Change since mid-July:
- B300 GPU rentals up 106%
- B200 up 66%
- H100 up 17%
- Average token prices down 58%
Charts of the Week: a16z.news/p/charts-of-th…
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Nasdaq: red.
Compute: green.
B200 +20.97%
A100 +19.74%
H100 +16.99%
What’s driving this divergence?
Compute: green.
B200 +20.97%
A100 +19.74%
H100 +16.99%
What’s driving this divergence?
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Ornn retweeted
Objectively remarkable chart. Even chips from 2020 are still seeing their rental value increase.
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Yesterday our Co-Founder & CEO @Bavaria_Kush joined the @CFTC’s inaugural Frontier Forum on the Agentic Trading panel, discussing autonomous agents in markets and how the regulatory framework should apply.
Thanks to the CFTC Innovation Task Force for the invitation to join the conversation early.
Thanks to the CFTC Innovation Task Force for the invitation to join the conversation early.
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Anthropic’s S-1 reveals more than $700 Billion in future compute commitments, CoreWeave’s stock fell 21% in just three days, and B200 rental prices are approaching $8.50 an hour. What is happening in AI infra?
TLDR:
→ CoreWeave has a levered up balance sheet. It has ~$10 of uity. Amazon, Microsoft and Alphabet owe 20 to 40 cents
→ $10.6B of payments comes due by the end of 2027, with only $5.5B in the bank
→ DC delays squeeze CoreWeave through both potential penalties to customers and delayed revenue, while interest keeps accruing on debt-funded GPUs
→ The loan runs longer than the customer contracts underlying it, meaning that lenders are now underwriting residual value
→ After the dust settled, CoreWeave’s borrowing costs stayed high even as the broader bond market recovered.
Through 2030, $7 Trillion is going into AI data centers, all on opaque guesses about future GPU rents. Ornn’s H100 and B200 futures on ICE will give lenders and operators a public price to lend and hedge against.
TLDR:
→ CoreWeave has a levered up balance sheet. It has ~$10 of uity. Amazon, Microsoft and Alphabet owe 20 to 40 cents
→ $10.6B of payments comes due by the end of 2027, with only $5.5B in the bank
→ DC delays squeeze CoreWeave through both potential penalties to customers and delayed revenue, while interest keeps accruing on debt-funded GPUs
→ The loan runs longer than the customer contracts underlying it, meaning that lenders are now underwriting residual value
→ After the dust settled, CoreWeave’s borrowing costs stayed high even as the broader bond market recovered.
Through 2030, $7 Trillion is going into AI data centers, all on opaque guesses about future GPU rents. Ornn’s H100 and B200 futures on ICE will give lenders and operators a public price to lend and hedge against.
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Compute pricing has been a black box for too long.
Yesterday we launched Ornn for Providers to change that: pricing indices, forward curves, supply research, and bespoke pricing calculators in one place.
Available for select partners.
Yesterday we launched Ornn for Providers to change that: pricing indices, forward curves, supply research, and bespoke pricing calculators in one place.
Available for select partners.
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Ornn retweeted
Now announcing Ornn for Providers.
A platform that brings pricing indices, forward curves, supply research and bespoke pricing calculators into one place.
Helping price and plan compute capacity.
Available for select partners.
A platform that brings pricing indices, forward curves, supply research and bespoke pricing calculators into one place.
Helping price and plan compute capacity.
Available for select partners.
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Now announcing Ornn for Providers.
A platform that brings pricing indices, forward curves, supply research and bespoke pricing calculators into one place.
Helping price and plan compute capacity.
Available for select partners.
A platform that brings pricing indices, forward curves, supply research and bespoke pricing calculators into one place.
Helping price and plan compute capacity.
Available for select partners.
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Essential Monday morning read on how the GPU spot curve is moving across series.
The B200 premium recovery and A100 occupancy trends offer fascinating insights into evolving compute demand.
Thanks for putting these datasets to work, @ShanuMathew93
The B200 premium recovery and A100 occupancy trends offer fascinating insights into evolving compute demand.
Thanks for putting these datasets to work, @ShanuMathew93
Been able to play more with the @OrnnExchange datasets thanks to @wayne_nelmz @CharlieSheiner and an interesting time to do so given the big moves in recent weeks.
Ornn’s GPU spot price indices rose across all five public series over the two weeks to 25 October. B200 led at 9.70/GPU-hour, followed by H100 +14.3%, A100 +13.5%, H200 +12.3% and RTX PRO 6000 +7.7%.
B200’s price increase coincided with a decline in its tracked fleet’s rented share, from approximately 94.3% to 87.8% over the month, down 6.5 percentage points. A growing fleet could explain falling occupancy even if the number of rented GPUs increased. Ornn doesn’t disclose the fleet counts needed to distinguish those possibilities.
A100 showed a clearer combination of rising prices and occupancy: its weekly average price increased 11.3%, while its rented share rose 7.5 percentage points.
B200 spot also sits 71% above Ornn’s published one-year reservation rate of $5.67/GPU-hour, versus 51% a week earlier. The one-year and three-year reservation rates were identical in captures on 18 and 26 October. These are prices for committing to capacity for a specified duration. Unchanged published marks don’t establish whether newly negotiated contracts repriced.
The starting date changes the interpretation. B200 rose 19.9% from September’s $8.09 month-end spot price, compared with 30.2% from 11 October. Its premium over H200 was 68% on 26 September, fell to 22% on 15 October and recovered to 54% by 25 October.
The price increase spans all five tracked products over the fortnight. Without transaction volumes, fleet counts and contributor concentration, I can’t establish how much activity supports those moves but it's very interesting to dig into these!
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Spot on, @elonmusk.
Ornn Data behind this @a16z chart shows that exact shift: GPUs are trading as yield-generating assets rather than standard depreciating hardware.
Ornn Data behind this @a16z chart shows that exact shift: GPUs are trading as yield-generating assets rather than standard depreciating hardware.
The way to think about this is:
How many super smart and dedicated people do you want to hire? And they keep getting better.
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