Would cloud farms be practical if your assets lived on the cloud as well? That could solve the bandwidth problem both with the render cycle and collaboration with other shops.
Or would getting the assets there in the first place be impractical?
Or would getting the assets there in the first place be impractical?
Meaning you'd still have bottle necks and bandwidth issues in getting them somewhere. That's why large projects just send HDDs.
This is just a proof of concept.
For a character animator, there's an IK rig which, depending on the character, can be quite complicated, and IK involves a lot of math. Then there's the mesh deformation and blended IK/FK. And then things like hair and cloth simulation. And texture rendering. Doing that on a cloud would have latencies that would make it excruciating to work with.
Compositing would be just as bad; the amount of data involved is larger, and as you add layers and masks, filters that affect those layers and masks, you can pretty much throw any hope of interactivity out the window. Now imagine trying to paint out safety wires over a cloud...
Digital art requires a LOT more computing power than creating software.
Try playing a first person shooter on a laggy network, you'll get a sense for how frustrating and counter-productive what you're suggesting would end up being, though I suspect that it's because you're vastly underestimating how much goes on in digital artists' tools more than anything else.