Committed Use Contracts
Definition
Committed use contracts are agreements where a customer commits to pay for a defined amount of compute capacity, usage, or spend over a specified term.
Why it matters
Committed use can turn volatile spot GPU demand into financeable revenue, but only if the customer is creditworthy and the contract is enforceable, assignable, and matched to available capacity.
Technical details
Key terms
Review minimum spend, term, ramp schedule, take-or-pay language, service-level obligations, termination rights, cure periods, and customer credit.
A reservation or memorandum of understanding is not the same as a binding take-or-pay contract.
The provider must have enough power, cooling, network, and hardware delivery certainty to meet the commitment.
Financing impact
Lenders and investors may lend against contracted revenue, but they should haircut contracts with weak termination protections, unproven customers, usage-only pricing, or capacity dependencies outside the provider's control.