Meta is Leasing Out Its Compute Capacity

Welcome back. In this issue, we take a deep dive into the most disruptive event of H2 so far: Meta's entry into the cloud business to sell off its excess AI compute resources.

But more importantly, we zoom out to examine the trillion-dollar question this pivot raises: Is the "Compute Scarcity" narrative dead? And if so, are we witnessing the first cracks of an AI infrastructure bubble?

Meta's Pivot: The Catalyst That Broke the Scarcity Narrative

Following an epic run in Q2 and the first half of the year, the market hit its first major speed bump of H2. Reports emerged that Meta Platforms ($META) is developing plans for a cloud infrastructure business to lease out its excess AI computing power and host models like Muse Spark.

The market panicked. Curiously, the sharpest drops were not among the Big Three cloud giants (AWS, Azure, GCP), but rather among new cloud providers (NeoClouds) and hardware names. Nebius Group ($NBIS) plunged 17% following the news, and CoreWeave suffered similar sharp declines.

Meta's Pivot: The Catalyst That Broke the Scarcity Narrative

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