Financing the Rise of Neoclouds to Power the AI Boom

Since OpenAI launched ChatGPT in late 2022, global AI usage has more than doubled according to some estimates. The market is expanding rapidly as financial firms continue to invest in AI companies like OpenAI, along with the infrastructure and energy sources needed to power them. Bloomberg projectsthat the generative AI market alone will top $1.3 trillion by 2032, up from $64 billion in 2023. UBS estimates that global spending on AI infrastructure will reach $375 billion in 2025 and $500 billion next year.

A rising new class of cloud providers

With the AI boom comes surging demand for the underlying infrastructure and hardware that power AI, including graphic processing units (GPUs), a critical component of the data centers needed to run AI. In the U.S., the data center GPU market is projected to hit more than $40 billion by 2032, ten times its size in 2023. This trend has fueled the rise of neoclouds, a new class of cloud providers, such as CoreWeave – considered the AI hyperscaler, that specialize in high-performance, GPU-based computing for AI and machine learning workloads.

Supporting leaders in the AI market

Societe Generale has built a strong track record advising neocloud providers like CoreWeave and financing AI infrastructure and data center projects across the U.S. Most recently, the Bank participated in a significant new financing for the purchase and installation of Nvidia GPU chips by CoreWeave to serve OpenAI’s workloads – one of the first GPU financing transactions in the global banking sector. The $2.6 billion Delayed Draw Term Facility will be used to acquire the latest Nvidia GPU chips (Blackwell GB200s), assembled in Dell servers, and housed in a dedicated Core Scientific-operated data center in Denton, Texas.

The deal underscores Societe Generale’s commitment to supporting neocloud providers and other leaders in the AI market. Earlier this year, the Bank led a financing of a high-performance computing (HPC) data center built for OpenAI as part of the Stargate project in West Texas, a joint venture by SoftBank, OpenAI, Oracle, and MGX. Societe Generale also recently led a $600 million debt financing for a new HPC data center project leased to CoreWeave, sponsored by Blue Owl, Chirisa Technology Parks and PowerHouse Data Centers in Virgina.

“Neoclouds and other GPU-as-a-service providers like CoreWeave represent an emerging asset class we expect to grow exponentially over the next several years as demand for AI compute capacity accelerates,” said Valtin Gallani, Societe Generale Americas Head of TMT Finance and Advisory. “We’ve built a strong relationship with CoreWeave through multiple financings, including corporate revolvers, high-yield bonds, and data center projects, establishing Societe Generale as a leading AI infrastructure financing and advisory bank.”