Gartner warns 80% of neoclouds will fail by 2030

Gartner forecasts that 80% of neoclouds will go bankrupt by the end of 2030, arguing that $3.5 trillion in AI infrastructure spending faces impairment due to insufficient demand. John Lovelock, Gartner’s chief forecaster, stated that current compute capacity exceeds demand, with significant processing power given away in freemium solutions. The firm estimates data center owners must generate $8.5 trillion in revenue through 2030 to cover capital spending, financing costs, and returns, whereas total enterprise and consumer AI revenue is forecast to reach no more than $3.6 trillion. This analysis follows a three-week downtrend in tech stocks, with the Nasdaq losing 3% on Thursday. Goldman Sachs reported hedge funds sold tech stocks at their most rapid pace in at least a decade. Citadel CEO Ken Griffin declared the market is almost certainly in a bubble, citing uncertain ROI, while Blackstone president John Gray countered that AI capacity is being built to keep up with existing demand, not hoping for future demand. CoreWeave’s stock fell between 25% and 30% amid investor anxiety over its financial structure and customer concentration, with approximately 75% of its revenue coming from three major clients including Microsoft and Anthropic. While some analysts view the stock drop as a sign of unsustainable spending, others note that AWS is fully booked through 2028, suggesting the primary constraint is power availability rather than a lack of customers.