Capacity Wars: Securing GPU’s Without Paying Scarcity Premiums

In today’s AI infrastructure landscape, scarcity premiums emerge when buyers commit to a single chip type, geographic region, or commercial model. These commitments often backfire when unexpected events occur, such as chip launch surges, regional power limitations, or sudden changes in model features. Instead of reacting by paying more for priority access, organizations should adopt a smarter planning strategy.

The recommended approach is to treat compute resources as a diversified portfolio. Rather than pricing for a single moment in time, contracts should be structured to guarantee throughput across multiple chip classes and regions. These contracts should include pre-agreed substitution options and pricing step-downs that activate as supply constraints ease.

Understanding Scarcity Premiums and Their Lifecycle

Scarcity premiums are not random; they follow predictable patterns and tend to be episodic. These premiums typically spike during three key moments:

• • Chip Launches: When new chips are released, bottlenecks often occur in high-bandwidth memory (HBM) or interconnect technologies such as NVLink.
  • Regional Power Constraints: Limitations in local energy grids or imposed energy caps can restrict compute availability.
  • Model Feature Shocks: Sudden increases in model complexity, such as longer context lengths or more intricate routing, can unexpectedly drive up demand.

Fortunately, these spikes are temporary. As manufacturing capacity increases and operational efficiency improves, the premiums begin to decline. The most strategic buyers anticipate this decline and ensure that their contracts include pre-negotiated step-downs in pricing, rather than relying on future renegotiations.

The 12–36 Month Capacity Ladder Strategy

To mitigate scarcity risks and maintain cost control, organizations should build a capacity ladder that spans chip classes, geographic regions, and multiple providers. Each rung of this ladder should be:

• • Explicitly Priced: Every reservation tier must have a clear cost structure.
  • Swappable: Organizations should be able to substitute across approved alternatives without renegotiating.
  • Aligned to Vendor Refresh Cycles: Each tier should correspond to expected hardware refresh timelines.

The ladder should include:

• • Transitions from current-generation to next-generation chip classes.
  • Coverage across primary and secondary regions.
  • Engagement with at least two providers.

Each rung should be annotated with:

• • A committed base reservation.
  • An indexed burst capacity tied to market signals.
  • Swap windows that allow flexibility during vendor refreshes.

Overlay this structure with an expected decay curve for scarcity premiums. These should be expressed as pre-priced step-downs, not left to future negotiation. The goal is to front-load access while locking in favorable pricing and substitution rights, ensuring that new chip launches do not disrupt unit economics or delivery schedules.

Negotiation Tactics to Secure Capacity Without Overpaying

Here are actionable strategies to implement immediately:

1. 1. Laddered Reservations Instead of All-In Commitments: Reserve capacity in tranches—for example, 40% now, 30% in six months, and 30% in twelve months. Spread these reservations across two regions and two chip classes. Include “waterfall rights” in the contract, allowing the provider to fulfill from any approved class or region at pre-agreed pricing deltas.
   2. Chip-Class Equivalency Table: Attach an annex that maps chip classes based on performance, memory, and interconnect specifications. For example, include metrics like TFLOPs, HBM capacity in gigabytes, and NVLink bandwidth. If the vendor introduces a newer chip class, the buyer automatically upgrades at a set price-performance ratio. If only older chips are available, the buyer receives an automatic discount based on the equivalency table.
   3. Run-Rate Bands and Indexed Burst Pricing: Split pricing into two components:
      1. Base Run-Rate: This covers committed queries per second (QPS) or compute hours.
      2. Burst Pricing: This is indexed to a transparent market signal, such as regional energy prices or published spot rates.

Include burst caps and a grace buffer to accommodate spikes during product launches.

1. 4. Lead-Time Service Level Agreements (SLAs) with Liquidated Damages: If the vendor fails to deliver capacity within the agreed timeframe (e.g., within N days), they must provide temporary substitute capacity from another region or chip class. Additionally, fee credits should be issued. The credits should escalate accordingly if the substitute fails to meet defined latency thresholds.
   5. Evergreen Upgrade Credits: Each refresh window—typically every 18 to 24 months—should trigger a credit-for-swap mechanism based on a fixed fee schedule. Tie these swaps to improvements in performance per watt, allowing unit economics to improve without renegotiation.
   6. Most-Favored Capacity (MFC) Clause: Include a clause that ensures if the provider offers better reservation premiums or allocation priority to comparable customers in the same region or volume band, your terms automatically adjust downward to match.
   7. Dual-Provider Operationalization: Contract for dual-run rights and ensure cross-provider orchestration. This includes routing keys, evaluation parity, and parity in credentials and API rate limits. This ensures that your backup plan is not just theoretical but executable.

Role-Based Responsibilities: Persona Playbook

1. 1. Chief Information Officer (CIO) / Head of Platform: Responsible for forecasting load shapes and designing the 12–36-month capacity ladder across providers and regions.
   2. Head of Sourcing / Procurement: Manages the equivalency annex, waterfall rights, and MFC clauses. Coordinates lead-time SLAs and damage recovery.
   3. Chief Financial Officer (CFO) / Financial Planning & Analysis (FP&A): Sets tranche sizes, defines step-down guardrails, manages burst indexing, and oversees credit recognition.
   4. Product Manager / General Manager (GM): Declares launch windows and throughput requirements. Approves grace buffers for launch-related spikes.

Monthly Action Checklist

1. 1. Conduct an inventory of demand for the next 6, 12, 24, and 36 months, categorized by criticality and compute intensity.
   2. Build a capacity ledger that includes current reservations, regions, chip classes, lead times, and pricing steps.
   3. Draft a chip-class equivalency table with minimum performance, memory, and interconnect specifications.
   4. Model a three-tranche ladder that includes base reservations, indexed burst pricing, and swap windows.
   5. Price the expected decay of scarcity premiums.
   6. Establish a dual-run staging environment with two providers, ensuring parity in evaluation and latency before year-end.

Board-Level Risk Framing

Present the capacity ladder as a strategic control mechanism for mitigating revenue risk.

Benefits include:

• • Fewer missed product launches.
  • Faster adoption of hardware refreshes.
  • Declining unit costs as scarcity fades.
  • Codified continuity when lead times slip.

Translate this strategy into a framework for throughput assurance and margin protection—not just a reduction in cost per GPU-hour.

Take the Next Step: Capacity Ladder Review

Use Avasant’s Reserve-vs-On-Demand Calculator and schedule a 30-minute Capacity Ladder Review. In one working session, the team will:

• • Analyze your demand curve and current exposure across chip classes, regions, and providers.
  • Draft laddered reservations, the chip-class equivalency annex, and waterfall rights tailored to your portfolio.
  • Model pricing step-downs and burst economics to help you secure throughput without incurring scarcity premiums.

Outcome: You will leave the session with a customised capacity ladder strategy, pre-priced step-downs, and a clear path to throughput assurance—without overpaying for priority access.

This review is your opportunity to turn uncertainty into control. By planning smarter, not spending harder, you’ll protect margins, ensure continuity, and stay ahead of compute scarcity.