Thread by @SemiAnalysis_

H100 ornn index spot prices are falling, now at $2.42 per hour, roughly 40% below the May peak. The ecosystem is concerned that this is a sign that compute demand and by extension the appetite for AI is waning. (1/5)🧵

The important signal is that this is likely a spot price index not term pricing. Our neocloud survey for 1-year H100 contract prices have isntead climbed from a trough of roughly $1.70 per hour late last year to about $2.65 per hour today. (2/5)

Spot and on-demand markets are where buyers run POCs, one-off evaluations, burst workloads, and capacity overflow. They can be useful when taken as part of a dataset but are not reflective of where production economics are set. Contract pricing is where sustained workloads show up with the intention of planned, recurring, revenue-bearing inference or training demand. (3/5)

Falling spot prices alongside rising contract prices are therefore not evidence of weaker demand. It is more likely a shift of opportunistic capacity usage toward committed production deployment. Serious buyers are locking in term capacity, and that is pushing contract pricing higher. (4/5)

The contract market is the one that better reflects where durable AI workloads are actually going and we track this in our GPU pricing index. (5/5) semianalysis.com/gpu-pricing-in…