Cheaper cloud drives are slowly gaining a huge following from tech companies, AI firms, and crypto miners as prices for the latest GPUs and AI chips continue to surge.

According to TechCrunch, cloud servers CoreWeave and Lambda Labs are reporting increased earnings over the past months as companies turn to cheaper alternatives to train their AI models.

Nonprofit group Voltage Park and Together AI also reportedly secured millions of investments to build more data centers amid high demands for their services.

AI Hype Drives Up AI Chips, GPUs Prices

Training AI models often require a lot of data and processing power, resources only obtainable by building their own data center or outsourcing most of the data processing to third-party cloud servers.

With GPU and AI chips needed to build data centers becoming much more expensive, more and more have started turning towards cloud drives to handle their operations.

Even major AI firms like Anthropic and Hugging Face have been reported to relegate some of their AI developments to other cloud services amid steep competition to acquire the latest batch of semiconductors.

It does not help that more popular cloud drives like Amazon's AWS and Google's Cloud are a bit pricey for many startups just taking their first steps into the industry.

The result was a surge in tech companies looking for cheaper cloud services to ease costs amid the increasingly competitive AI market.

So far, Microsoft and OpenAI have already secured a billion-dollar deal with CoreWeave to lend its computing power for the companies' next major AI projects.

Also Read: Microsoft Debuts New AI Chip to Compete with NVIDIA, Meet Demands

NVIDIA, AMD Sales at Record-High Amid AI Boom

Despite more companies turning to cloud servers, chip manufacturers NVIDIA and AMD remain at the top of their game as the hype for AI continues to surge in 2024.

In its latest earnings report, NVIDIA recorded a 586% revenue growth from last year to a total profit of $22.1 billion while AMD experienced a 47% margin growth to $5.5 billion.

Even Intel is optimistic in the coming years following massive investments from the US government to build its largest chip facility, supplying both private companies and government efforts in the process.

Related Article: NVIDIA Revenues Soar Beyond Expectations Amid AI Chip Boom