Business Model

Reserved Instances

Definition

Reserved instances are GPU compute resources purchased via a time-bound commitment — typically 1, 6, 12, or 36 months — at a significant discount to on-demand pricing in exchange for guaranteed payment. Reserved pricing for B200-class GPUs ranges from $2.25/hr for 36-month commitments to $4.99/hr on-demand, representing discounts of 25-55% depending on provider and term length. CoreWeave publishes "up to 60% off on-demand for committed usage." Reservations provide revenue predictability for operators and cost savings for customers with sustained workloads.

Technical Context

Reservation contracts vary significantly in structure: some require upfront payment, others charge monthly; some guarantee specific GPU models, others offer flexibility across generations; some include SLA commitments, others are best-effort. The contract terms — duration, pricing mechanisms, indexation clauses, termination rights, and covenants — are critical variables in both customer procurement and operator revenue modelling.

Advisory Relevance

Reserved instance pricing and discount structures are central to our due diligence work. Management teams frequently understate real-world discount concessions in their business plans. Our benchmark data consistently shows market discounts 2-3x deeper than management assumptions, which materially affects revenue projections.

This glossary is maintained by Disintermediate as a reference for GPU infrastructure professionals, investors, and operators. Each entry reflects terminology as used in active advisory engagements and market intelligence work.

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