Autor Cointelegraph By Felix Ng

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Elon Musk warns that over 200 specialist AI cloud providers could fail or consolidate as lenders tighten up their purse strings. Musk said Sunday on X that lenders had largely stopped providing financing to companies without substantial revenue streams outside AI data centers. He said SpaceX had secured $40 billion in debt financing for GPUs because of its investment-grade status and revenue from its Starlink satellite internet and rocket businesses.  “That means the 200+ neoclouds are going to see guppy-level death and consolidation. Some will make it through, but not many,” he said. A neocloud is a specialist cloud company that rents out computing power for AI, usually through data centers packed with powerful GPUs. Musk’s warning follows an October forecast from research firm Gartner that more than 80% of neocloud providers will cease operating independently by 2030, as the industry struggles to generate sufficient returns on massive AI infrastructure investments. The warnings could also have implications for Bitcoin miners that have pivoted into AI infrastructure. For example, IREN has expanded into AI cloud services, renting computing power to customers, while Core Scientific provides data center hosting for neocloud customers such as CoreWeave.Related: Bitcoin hashrate hits seven-month high as AI shift fails to ease mining competitionIn its forecast, Gartner said AI providers are expected to spend nearly $1 trillion on infrastructure in 2026 and another $6 trillion between 2027 and 2030, but said there is insufficient revenue to deliver profitable returns on all those investments. The pressure could be particularly acute for neoclouds, which must earn enough from AI computing services to sustain their operations. Larger cloud companies have more diversified revenue streams that could support AI investment for years, Gartner said. Even strong market growth may not be enough. Gartner forecasts spending on AI-optimized infrastructure-as-a-service will rise from $66 billion in 2027 to $174 billion in 2030, but said most providers could struggle to recover their investment before the current generation of AI chips is replaced. SpaceX sees sharp jump in AI revenueMusk’s comments came days after SpaceX reported that its “Super Intelligence” business generated $7.6 billion in third-quarter revenue, up 830% from a year earlier and accounting for more than half of the company’s $14.6 billion in quarterly sales.The company attributed the growth to new cloud services agreements, its acquisition of Cursor and increased adoption of its Grok AI model.Magazine: AI agents help rescue ETH’s Glamsterdam fork, ‘Steal My Bitcoin’ site: Hodler’s Digest

Cointelegraph is committed to providing independent, high-quality journalism across the crypto, blockchain, AI, and fintech industries.All news, reviews, and analyses are produced with full journalistic independence and integrity. For more details on our standards and processes, please read our Editorial Policy.

Crypto hardware wallet maker Keystone has disclosed a website security breach that exposed customer information to attackers, raising concerns about targeted scams and physical attacks. Keystone said Saturday that it detected suspicious activity earlier in the week and confirmed Friday, after reviewing API activity with Shopify, that an unauthorized third party had accessed customer shipping information. This included names, contact details, shipping addresses and other order details, such as items bought. “We’ve blocked access, fixed the vulnerability, opened an investigation, and are emailing affected customers,” said the company.Keystone warned that the exposed information could be used for targeted phishing attacks. However, security researcher Taylor Monahan also raised concerns that leaking shipping addresses could expose customers to physical attacks and kidnappings. Blockchain security firm CertiK recorded 52 verified wrench attacks worldwide in the first half of 2026, up 33% from 39 during the same period last year. Such crimes, commonly called “wrench attacks,” involve using physical threats or violence to force cryptocurrency holders to surrender their assets. “Again, we’re truly sorry to everyone affected,” Keystone said. The company did not disclose how many customers were impacted. Keystone questioned over promise to delete customer dataThe breach has also raised questions about Keystone’s handling of older customer information. In a 2023 blog post, Keystone said it had reduced its customer data retention period to 180 days following security incidents affecting other hardware wallet manufacturers. However, some customers said they received breach notifications despite purchasing their devices more than two years ago, raising questions about what information Keystone retained and whether the notifications indicate that older order records were not deleted as promised. Related: Italy investigates government email breach linked to Revolut data leakAn X user going by “OG DEGEN” said they received a call from a scammer claiming they were law enforcement investigating a fraud case. The user suspected the caller obtained their information through a Keystone order placed in 2024, based on the personal information the caller referred to. “I think their plan was to convince me that my private keys had been exposed and then send me a phishing link to supposedly reset them,” they wrote on X. Another X user, trintaetres, also said they received the email notification despite buying the device over two years ago. Cointelegraph contacted Keystone to ask how customer information from purchases made more than 180 days earlier could have been exposed despite its previously announced retention policy, and how many customers were affected. The company did not respond by publication time. Magazine: AI agents help rescue ETH’s Glamsterdam fork, ‘Steal My Bitcoin’ site: Hodler’s Digest

Cointelegraph is committed to providing independent, high-quality journalism across the crypto, blockchain, AI, and fintech industries.All news, reviews, and analyses are produced with full journalistic independence and integrity. For more details on our standards and processes, please read our Editorial Policy.