Nutanix built $20m AI cluster to reduce use of Copilot and Claude, expects ROI in a year

Nutanix is making strides in making its stack compatible with the Arm architecture, driven by the high costs of hardware and a desire to serve customers with flexible deployment options. CEO Rajiv Ramaswami stated that Nutanix customers are currently concerned about hardware costs and availability, which are causing delays in some purchases.

To address this, Nutanix is expanding its hardware compatibility list and supporting external storage devices, allowing users to migrate away from VMware without replacing hardware. The company is also optimizing its software footprint and has allowed bare metal installations of its Kubernetes Platform, further minimizing hardware requirements.

Arm support is seen as another way to ensure Nutanix's software can run on lower-cost hardware, an advance from its 2024 position. Nutanix has also launched an update to its Enterprise AI suite, adding a Model Context Protocol (MCP) gateway to control data and service access, and has invested $20 million in its own AI infrastructure, expecting to recoup the investment within a year by using open weight models and on-prem clusters.

AI usage has surged, leading to higher costs, and Nutanix now minimizes spending on tokens used in and produced by AI apps. The company reported Q4 results of $757 million in revenue, a 16 percent year-over-year increase, with full-year revenue growing 12 percent to $2.85 billion. Net income for the full year was modest at $1.5 million.

Nutanix sees significant growth potential, having won 3,000 new customers in the fiscal year, many of whom chose Nutanix as an alternative to VMware.