Artificial Intelligence (AI) has become one of the biggest investment themes in recent years. When most investors think about AI, they immediately think about companies like Nvidia, Microsoft, or OpenAI. However, behind the scenes, there is another group of companies quietly benefiting from the AI boom.

These companies are often referred to as NeoClouds.

Simply put, NeoCloud companies provide the computing power, data centres, GPUs and cloud infrastructure needed to train and run AI models. As demand for AI continues to grow, many businesses need access to powerful computing resources without spending billions of dollars building their own infrastructure.

This is where NeoCloud providers come in.

Today, we'll take a closer look at two companies operating in this space: Nebius (NBIS) and IREN (IREN).

Nebius is an AI infrastructure company focused on providing cloud computing services specifically designed for AI workloads.

Unlike traditional cloud providers that serve a wide range of customers, Nebius is built with AI applications in mind. The company provides access to high-performance GPUs, data centre capacity and cloud infrastructure that AI developers and enterprises need to train and deploy large AI models.

As AI adoption accelerates, Nebius is positioning itself as a specialised provider focused on this rapidly growing market.

One of the reasons Nebius has attracted significant investor attention is the speed of its growth.

The company recently reported revenue growth of more than 600% year-on-year as demand for AI infrastructure continues to exceed available supply. Management has repeatedly highlighted that much of its AI capacity remains fully booked, demonstrating the strong demand environment currently supporting the business.

Nebius has also secured several high-profile partnerships and customer agreements. The company has strengthened relationships with major AI ecosystem players, including Nvidia, while also securing large contracts with enterprise customers. These agreements provide greater visibility into future revenue growth.

Another area investors are watching closely is capacity expansion. Nebius has significantly increased its contracted power capacity and continues to invest aggressively in new data centres across multiple regions. Management believes this additional capacity will support substantial revenue growth over the next few years.

One advantage Nebius currently enjoys is its relatively strong balance sheet compared to some peers. The company has built its AI cloud platform without taking on excessive debt, giving it more flexibility as it continues to expand.

Many investors may remember IREN as a Bitcoin mining company. However, the company has been undergoing a major transformation over the past few years.

Today, IREN is increasingly positioning itself as an AI infrastructure provider. Leveraging its experience managing large-scale computing power and energy resources, the company is expanding into AI cloud services while continuing to utilise its existing infrastructure assets.

One of IREN's biggest advantages is its access to power. As AI data centres become increasingly energy-intensive, access to electricity and suitable locations is becoming one of the industry's most valuable assets. This is an area where IREN believes it has a competitive advantage.

IREN recently announced significant expansion plans that could substantially increase its AI cloud capacity over the coming years. Management has secured access to approximately 5 gigawatts of power capacity and is targeting substantial growth in annual recurring revenue as new AI infrastructure comes online.

The company has also strengthened its relationship with Nvidia. Beyond securing major AI cloud contracts, Nvidia has been working closely with IREN as part of its broader AI infrastructure strategy. This partnership provides additional validation for IREN's long-term AI ambitions.

Another important development is IREN's acquisition of software and cloud capabilities through strategic acquisitions. These moves are designed to help the company evolve from simply providing infrastructure into offering more complete AI cloud solutions to customers.

That said, investors should also be aware of the challenges. Building AI infrastructure is extremely capital intensive. IREN continues to invest heavily in new facilities, which has resulted in rising capital expenditure, increased debt levels and the potential for future share dilution as the company funds its growth plans.

The AI boom is creating opportunities far beyond just chipmakers and software companies. As AI models become larger and more powerful, the demand for computing infrastructure continues to rise. This has created a new category of companies known as NeoCloud providers, businesses that supply the critical infrastructure needed to power the AI revolution.

Nebius and IREN are two companies approaching this opportunity from different angles.

Nebius has built a strong reputation as a dedicated AI cloud provider and has demonstrated explosive revenue growth as demand continues to accelerate.

IREN, on the other hand, is leveraging its infrastructure expertise and power assets to transform itself into a major AI cloud player over time.

For investors interested in the AI infrastructure theme, these are two companies worth keeping on the watchlist. As always, while the long-term opportunity appears exciting, investors should continue monitoring execution, growth plans and valuation closely.

After all, in investing, a great story still needs to be supported by solid execution and a strong trend.

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Sources:
1. Nebius reports first quarter 2026 financial results. Available at: https://nebius.com/newsroom/nebius-reports-first-quarter-2026-financial-results
2. IREN Q3 FY26 Results Conference Call. Available at: https://iren.gcs-web.com/static-files/2289f56f-f0f8-4673-a7d4-2359afe93eb6
3. NVIDIA and IREN Announce Strategic Partnership to Accelerate Deployment of up to 5 Gigawatts of AI Infrastructure Available at: https://nvidianews.nvidia.com/news/nvidia-and-iren-announce-strategic-partnership-to-accelerate-deployment-of-up-to-5-gigawatts-of-ai-infrastructure

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