The United States is in a global race for supremacy in artificial intelligence. This technological and economic contest will be won by the country with the most computing resources, in market shorthand, “compute.” At the moment, the U.S. is slightly ahead of China in this regard.

U.S. companies are also competing intensely in a quest to lead in AI and its applications. Prodigious amounts of money are being invested in AI. Capital investment in graphics processing units, the accelerated computing chips central to AI, is attracting staggering levels of investment. This year, OpenAI, Amazon, Alphabet, Meta, and Microsoft are expected to invest more than $325 billion in AI data centers. Over the next 3 years, the largest U.S. technology companies could invest as much as $3 trillion in the AI space.

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But there is a clear shortage of accelerated computing GPU chips. In plain words, the U.S. and the global economy are short of “compute.” This lack of “compute” supply has created a new business sector, Neocloud AI companies. Neoclouds are new cloud providers that specialize in offering accelerated computing, especially Nvidia GPUs, designed for demanding AI and machine learning workloads.

Traditional hyperscalers, such as Alphabet, Amazon, and Microsoft, offer broad, general-purpose cloud services. The technology giants provide vast online storage and computing resources accessible from anywhere with an internet connection. By contrast, Neoclouds are computing companies that provide access to Nvidia’s highest-performance chips. Neocloud companies focus on high-performance AI workloads.

There is a “land grab” for accelerated AI chips and the energy that powers the chips. Microsoft, one of three global leaders in cloud computing, has invested $33 billion in Neocloud companies in recent weeks. Microsoft reiterated that there is a shortage of AI data center capacity, and by signing deals with Neocloud companies and obtaining access to Nvidia’s most powerful chips, it can free up its data centers for its most profitable AI services. Microsoft does not want to be capacity-constrained.

BlackRock, the world’s largest asset manager, is in advanced discussions to acquire Aligned Data Centers, a relatively unknown Neocloud company. The value of the proposed transaction is estimated to be $40 billion. BlackRock wants to expand its AI footprint to support surging demand for AI systems and applications.

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Aligned has only been in existence for 12 years, but it owns or is in the process of building 78 data centers across the U.S. financial markets, which have been pressuring it to rapidly expand its data center capacity. In January, the company raised $12 billion in capital to build an additional 5 gigawatts of data center capacity, sufficient to power 50% of New York City on a hot summer day. Now, Aligned is valued at $40 billion.

Perhaps the best-known Neocloud company is CoreWeave. The company was founded in 2017 and provides accelerated computing GPUs for AI applications. Just 3 years ago, CoreWeave was valued at about $2 billion. Today, the company’s equity value is almost $70 billion. The demand for the services of Neocloud companies and the track record of CoreWeave demonstrate that the AI revolution is just getting started. Talk of an AI bubble is nonsense.

The writer owns shares in Nvidia.

James Rogan is a former U.S. foreign service officer who has worked in finance and law for 30 years. He writes a daily note on the markets, politics, and society. He can be followed on X and reached at [email protected].