Compute resale: renting out AI's computing power

How it makes money

A compute reseller sits between the chip makers and the AI developers. It buys or leases graphics processors, the power to run them and the buildings to house them, then rents the capacity to customers who need it for months or years at a time. The customer gets computing power without building a data center. The reseller gets a long contract it can borrow against.

Walk it through the choices that make up a business model and two of them do almost all the work. The payer is a handful of very large customers, not thousands of small ones. And the margin comes from the spread between the rent and the cost of money, because the hardware is bought with debt long before the rent arrives.

One company, read closely

CoreWeave is the largest of the US-listed resellers that file with the SEC. In 2025, about 67% of its revenue came from one customer, Microsoft. By the second quarter of 2026 its largest customer accounted for 36% of revenue and its two largest for 62%, and the company expects that concentration to continue "because of the long-term nature of contracts with those customers."

The debt is the other half of the business. At June 30, 2026, CoreWeave owed $35,551 million of principal. Contractual interest in the second quarter came to $592 million, 23% of the quarter's revenue of $2,575 million, and $4,413 million of principal falls due in the rest of 2026. The company warns that its debt may make some customers wary of contracting with it at all.

The tenant sets the rate

Across the sector, the price of money follows the customer. IREN sold notes at 5.96% to pay for GPU capacity under its contract with Microsoft. Applied Digital paid 6.750% for a campus leased to Oracle. Hut 8 borrowed $4,250 million at 6.129% until 2042 against a data center to be leased to a tenant rated AA- or higher. CoreWeave, borrowing on its own credit, paid 9.625% on notes in June 2026, and in August agreed a term loan at 5.50% over the benchmark rate, a full point more than the one it signed in May.

Measured against the yield on top-rated five-year corporate debt in the same month, the extra interest was 1.26 points for IREN, 2.30 for Applied Digital and 4.92 for CoreWeave's June notes. On the other side of those contracts sit very few, very large buyers: OpenAI alone signed two contracts with CoreWeave worth up to about $11.9 billion and $6.5 billion.

How it fails

The filings name the failure modes plainly. Concentration means one lost contract can take a large share of revenue with it. Debt taken on before the rent arrives means a reseller has to refinance in whatever market it finds. And that market can tighten fast: seven US-listed resellers filed 12 new financings in the second quarter of 2026, and 3 in the third.

Questions

What is compute resale?

A business model in which a company buys or leases chips, power and data centers and rents the computing power to AI developers, usually under multi-year contracts, financing the hardware with debt.

What is a neocloud?

The industry's name for a cloud company built around renting GPU capacity for AI. US-listed examples that file with the SEC include CoreWeave, Applied Digital, IREN, TeraWulf, Cipher, Core Scientific and Hut 8.

Why do compute resellers carry so much debt?

Because the hardware and buildings are paid for before the rent comes in. At June 30, 2026, CoreWeave owed $35,551 million of principal against second-quarter revenue of $2,575 million.