CME Group and index provider Silicon Data are joining forces to create a futures market for computing power, a key source driving the AI boom.
The futures, which are pending regulatory approval, will help traders, financial firms, AI builders and cloud providers manage volatility and price swings. They will allow these market participants to bet on or hedge the future cost of computing power.
The new contracts for the future rental of graphics processing units, or GPUs, which can take months to order, will be based on Silicon Data’s indices.
Silicon Data, founded by former DRW trader Carmen Li, created daily GPU benchmarks for on-demand rental rates, giving customers insight into the cost of goods for those building AI products or in need of GPU computing power.
The company’s Silicon Data H100 Rental Index tracks the hourly cost of renting a GPU, which trains AI models.
A shortage of computing power worldwide has limited AI developers’ ability to continue to advance their systems and forced many to impose caps on the usage of their products.
Soaring demand for computing resources, needed to build and run AI models, has touched off hundreds of billions of dollars in investments in new data centres with some researchers projecting that trillions of dollars will ultimately be spent on new AI infrastructure.
Until now, it’s been difficult to hedge against price swings and other costs. CME’s addition of compute futures signals a broader shift to make the asset tradable like other commodities. Moreover, creating a futures market can help make the costs more transparent.
BlackRock chief executive officer Larry Fink has stated that a new asset class will likely be buying futures of compute given the shortage and high demand.
“As the backbone of the digital economy, compute is the new oil of the 21st century,” CME CEO Terry Duffy said in the statement. “Every AI model trained, every transaction cleared and every byte of data processed runs on compute, which is becoming a fast-emerging asset class in its own right.”
