The neocloud shakeout is coming, and Nvidia has the most to lose

After a week of plunging stock prices and scrapped IPO plans, industry executives expect a shakeout among up-and-coming AI cloud providers. Nvidia has a lot riding on how it plays out. Hundreds of AI cloud providers are rushing into the market right now. Two executives from the data center and neocloud industries told The Information that only seven to ten of them will still be around in a few years.

Several executives think consolidation is inevitable. Their predictions come after a week in which some investors lost confidence in the so-called "neoclouds." Australian provider Firmus abruptly pulled its IPO, and shares of CoreWeave and its smaller rivals fell about 20 percent, according to The Information. Bloomberg reports that CoreWeave lost a quarter of its market value, while a measure of its credit risk hit a record high. "We'll definitely see consolidation," said David Driggers, CEO of neocloud provider Cirrascale.

He expects deep-pocketed asset managers, along with telecom and fiber companies, to "pick up a neocloud here, a neocloud there." British provider Nscale shows how shaky things have gotten. According to…