Former OpenAI researcher leads $20 billion fundraising to establish neocloud infrastructure platform focused on AI compute supply, involving multiple financing opportunities.
Leopold Aschenbrenner, an outstanding German AI researcher and investor who worked at OpenAI, launched his own "Situational Awareness" hedge fund in September 2024. This AI-focused fund has achieved returns exceeding 1,000% since its inception and currently manages assets exceeding $20 billion.
Aschenbrenner believes that the ultimate bottleneck for AI market growth is not algorithms, but physical constraints in data centers, chips, and power grids. This is why his fund invests heavily in "new cloud" companies. Unlike "hyperscale" clouds such as Amazon Web Services (AWS), which offer broad general-purpose cloud services, new cloud companies provide cloud infrastructure services exclusively for AI companies.
By installing specialized hardware (such as data center GPUs) in streamlined architectures, new cloud companies can handle AI tasks faster and cheaper than hyperscale cloud providers. They can also offer more flexible contract terms. According to data from Synergy Research Group, as the AI market expands, the new cloud market could grow explosively at a 58% compound annual growth rate from 2025 to 2031.
This is why Situational Awareness' investments in three new cloud companies have attracted so much attention—Nebius (NASDAQ: NBIS), CoreWeave (NASDAQ: CRWV), and IREN (NASDAQ: IREN). Nebius, headquartered in the Netherlands, provides customized AI infrastructure services for the data training, edtech, and robotics markets. CoreWeave, headquartered in the United States, primarily helps companies run GPU-intensive tasks remotely. IREN, headquartered in Australia, is another vertically integrated AI cloud data center company that uses only renewable energy.
Nvidia (NASDAQ: NVDA), the world's largest data center GPU manufacturer, owns major stakes in Nebius and CoreWeave and has an option to purchase a major stake in IREN. Analysts expect all three companies to achieve explosive sales growth in the coming years.
Nebius, CoreWeave, and IREN trade at 6x, 3x, and 7x next year's sales, respectively. These price-to-sales ratios are surprisingly low, but this may be because investors are concerned about the high costs of expanding their cloud infrastructure.
However, in the long term, economies of scale may reduce their costs and stabilize profit growth. This is why investing in these new cloud companies could be a wise move, even if short-term concerns about their spending continue to depress their valuations. Following Aschenbrenner's and Nvidia's lead, it's also a good idea to diversify investments across all three companies and other new cloud companies, in case one underperforms.
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Leo Sun holds a position in Amazon. Motley Fool holds positions in Amazon and Nvidia and recommends both companies. Motley Fool has a disclosure policy.