New network data from Backblaze quietly kills the neocloud bull case. AI traffic in an inference world is increasingly bursty, concentrated, and rotating back to hyperscalers post-training. That implies cyclicality, utilization risk, and a capped TAM. Neoclouds persist, but as shock absorbers for peaks, not as compounding infrastructure.

https://www.backblaze.com/blog/network-stats-for-q4-2025-neocloud-traffic-trends/