Rising "Neocloud" Demand from Financials

Jane Street has signed a $13bn , five year AI cloud contract with "neocloud" provider Crusoe, a former crypto-mining company (2018-2024) which pivoted into AI data-center infrastructure. Crusoe supplies AI compute to Meta, Oracle and now Jane Street. Financially, they recently raised $3bn at a $30bn valuation. Jane Street also has cloud agreements with CoreWeave in which it also has a $1bn equity stake.

JP Morgan Reportedly Curbs Financing to Market Makers

This comes in the light of market makers like Jane Street attempting to encroach on market share from banks, and poaching talent to do so.

Examples include Jane Street's expansion into Fixed Income markets, offering quotes on US Treasuries, the traditional remit of banks, as well as talent poaching, with Citadel poaching JP Morgan's head of high-touch trading.

JP Morgan has been estimated to have provided around 5% of Jane Street's total leverage, which will now decline. It remains to be seen if other banks follow suit, putting pressure on profitability of market makers.