Before Sale to Softcat, GDT Tapped Into Nvidia-Fueled Neocloud Gold Rush

Chris Kapusta, an executive at Softcat-owned GDT, explains to CRN how the U.S. solution provider’s 30 years of system integration experience and Nvidia’s financial support of customers have allowed it to build a ‘strong neocloud presence.’

With Softcat acquiring GDT for an “enterprise value” of $1.05 billion, the U.K. solution provider giant is gaining a U.S. systems integration business that has tapped into the rich vein of neocloud activity fueled in part by Nvidia’s investments.

In a Thursday interview with CRN before the acquisition was announced, GDT executive Chris Kapusta said the Dallas-based solution provider has been selling AI infrastructure and related services to roughly 20 neoclouds, the new class of cloud services providers that almost exclusively focus on fulfilling demand for AI compute.

[Related: Analysis: What Nvidia’s Massive Supply-Demand Gap Says About AI Mania]

According to research firm Gartner, neoclouds are expected to represent 20 percent of the $267 billion AI cloud market by 2030, underlining their competitiveness against hyperscalers.

“When I look at GDT’s AI business, we have a very strong neocloud presence. We’re selling a lot of infrastructure into neoclouds that are looking to build out rapidly for the enterprise demand,” said Kapusta, whose title is vice president of advisory and transformation.

The executive credited the neocloud traction with GDT’s 30 years of “building out complex, highly demanding high-performance infrastructure.”

But, Kapusta said, Nvidia has also played a significant role in providing the necessary investments for some of these neoclouds to gain access to AI systems. This, in turn, has allowed GDT to get neocloud deals across the finish line.

The executive believes this kind of activity can help other solution providers “secure more” deals with neocloud-type customers. “The neocloud market’s a big market. There’s a lot of room for the channel to play here,” he said.

How Nvidia’s Support Is Helping GDT Score Neocloud Deals

While Kapusta didn’t disclose customer names, he said there are many neoclouds that don’t have the same level of funding and financing that big names like CoreWeave and Lambda do to acquire AI infrastructure, which is very expensive.

“Where a number of them struggle out of the gate is really on getting the financing and getting the financing to work. So the demand’s there, the desire’s there. It usually comes down to the numbers and how the financing works,” he said.

Out of the roughly 20 neoclouds GDT is working with, about 25 percent of them have received backing from Nvidia in the form of equity investments, according to Kapusta.

“Those tend to be, I don’t want to say easier transactions, but they tend to be a little bit more qualified and funded versus some of the upstarts,” he said.

How Nvidia’s More Complex Deals Could Unlock More Opportunities

While Nvidia has been making equity investments for years in customers, the vendor has been expanding its financing activities over the past year to more complex arrangements.

These include deals in which GPUs are treated as an “investable asset” and Nvidia provides a financial backstop in the form of a guarantee to help customers finance AI infrastructure purchases. In some cases, it has provided minimum-revenue guarantees in exchange for customers sharing a percentage of their revenues above the minimum threshold.

The vendor has made it clear that it is not making loans in these arrangements but is instead “giving lenders the confidence to underwrite the project.”

While Kapusta said that none of GDT’s neocloud customers have entered arrangements like this with Nvidia, a couple of them “are in very early discussions.”

The growing rate at which Nvidia is financially backing customers has attracted heightened scrutiny, with “Big Short” investor Michael Burry, who took a short position in the AI infrastructure giant last year, calling the activity a “Wall Street stunt.”

However, Kapusta echoed comments by Nvidia officials in defending the moves, saying that these sorts of deals are meant to facilitate existing demand, not create it.

“What I think Nvidia has quickly realized is the market has to catch up to meet that demand, and with funding for some of these newer neoclouds sometimes being challenging, this is a way to help secure that at a more successful rate and help accelerate the capacity of GPU- and AI-driven infrastructure that’s coming online,” he said.