LoudCloud’s bandwidth lesson for today’s AI neoclouds

He recalled that bandwidth cost $1,500 per megabit in 1999 and was difficult to obtain, forcing LoudCloud to take a three-year contract. By 2001, he said, the price was $50 per megabit. He warned that borrowing to secure bandwidth at the earlier price could leave a business “upside-down” after prices fell.

Horowitz argued that CoreWeave faces a different supply dynamic: a massive shortage rather than excess supply. Token prices had fallen, he said, but GPU prices had not.

He also said data-center space was becoming more expensive, citing difficulty finding construction labor and political obstacles to building. In his account, supply-chain costs were rising while demand was not subsiding. He called those conditions major tailwinds for CoreWeave, while acknowledging that debt markets remained tough.