There are about a hundred new cloud merchants operating like CoreWeave around the world, borrowing funds from banks, bond markets, private equity funds, or issuing stocks and equity bonds through the stock market, then buying GPUs from Fedda to install their hardware in the cabinets and leasing their hardware to AI companies, including OpenAI and Meta, which seem worry-free. However, there are some flaws in their business model.

One is that the added value of the business is not significant, and the cost is very high. As seen from a report released by McKinsey last month, the evolution and next step of new cloud services, 36% of their revenue is gross sales costs, because they do not own the power and hydropower systems of their factories and data centers, they need to rent from the owners. The gross profit margin of 65% seems high, but depreciation expenditure accounts for 54%. Because $英偉達(NVDA)$   it iterations the chip value will rapidly decline, and the rents of older generation chips will also decline. According to McKinsey's calculations, the latest generation of B200 GPUs will rent $4.4 per hour for the first year of launch, and by the fifth year the rent will drop to $2.2.

After deduction, the profit margin of crwv Factory before the final interest and tax is only 8%.