Microsoft Secures Massive $19.4 Billion AI Infrastructure Deal with Nebius

Nebius signs $17.4 billion AI infrastructure deal with Microsoft, shares jump

Sept 8 (Reuters) - Nebius Group (NBIS.O), opens new tab said on Monday it will provide Microsoft (MSFT.O), opens new tab with GPU infrastructure capacity, in a deal worth $17.4 billion, over a five-year term, sending its shares soaring over 47% after the bell. The deal underscores the surging demand for high-performance AI compute, as companies invest heavily to bolster their AI infrastructure. Microsoft may also acquire additional services capacity under the deal, bringing the total contract value to about $19.4 billion. Nebius' core business involves providing Nvidia (NVDA.O), opens new tab graphic processing units and AI cloud as services. Nebius offers AI developers the computing, storage, managed services and tools they need to build, tune and run their AI models, with the help of its cloud software architecture and in-house designed hardware. Nebius will provide Microsoft access to dedicated GPU infrastructure capacity from its new data center in Vineland, New Jersey, starting later this year. "The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond," Nebius CEO Arkady Volozh said. Microsoft is the largest customer of CoreWeave (CRWV.O), opens new tab -- one of Nebius' competitors -- which earlier this year denied media reports that said it had seen contract cancellations from the hyperscaler. Amsterdam-based Nebius Group emerged from a deal to split the assets of Russian tech giant Yandex. Reporting by Juby Babu in Mexico City; Editing by Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab

Microsoft taps Nebius to supply up to $20bn of AI computing power

Microsoft has signed a deal worth up to $20bn with the artificial intelligence infrastructure group Nebius to supply computing power for the tech giant's AI operations over five years. It is the latest major deal for an AI cloud computing provider -- a small group of companies known as "neoclouds" -- as tech companies spend hundreds of billions of dollars to build the infrastructure needed to run their powerful AI models. Nebius's shares soared as much as 68 per cent to $108 in after-hours trading following the announcement. The $15bn company was formed last year by splitting off the overseas operations of Yandex, Russia's biggest internet group. Rival CoreWeave's shares rose more than 5 per cent as the deal signalled continued demand for AI infrastructure. Under the deal, Microsoft will lease computing power from Nebius's stock of graphics processing units (GPUs) -- the high-performance chips on which AI models are run -- at its new data centre in Vineland, New Jersey. Nebius said the contract was worth $17.4bn over the next five years, but that it could expand to $19.4bn if Microsoft increases its compute demands. Microsoft did not immediately respond to a request for comment. Nebius said it would finance the construction of its data centre and buy the necessary chips with cash flow from the deal as well as by raising debt secured against the contract. GPUs have become a lucrative asset class in the past two years since the launch of OpenAI's ChatGPT kick-started a wave of investment in AI infrastructure. Neocloud groups have raised billions of dollars of debt against their stash of chips. CoreWeave, which went public in March and is now worth about $45bn, has borrowed more than $12bn using its GPUs and services contracts with tech companies as collateral for the loans. Microsoft signed contracts with CoreWeave worth as much as $10bn last year, but later chose not to exercise an option for a further $12bn of data centre capacity, the Financial Times has reported. CoreWeave subsequently signed contracts to supply computing power to OpenAI worth roughly $12bn. Microsoft in July said its annual capital expenditure on AI would reach $120bn, up from $88bn the previous year and almost quadruple the $32bn in 2023. Amsterdam-headquartered Nebius is racing to build out new data centres for clients including French AI group Mistral. Its biggest data centre is in Finland but it has signalled it would expand in the US, where it said demand from customers is stronger than in Europe. Arkady Volozh, founder and chief executive of Nebius, said: "The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond." Shares in US-listed Yandex were suspended in 2022 following Russia's full-scale invasion of Ukraine. After a protracted negotiation with the Kremlin, Yandex struck a $5.4bn deal in February to sell its core Russian business to a consortium of investors. Nebius was formed from the remainder of Yandex's former international operations.

Nebius' stock soars 60% on multibillion-dollar AI infrastructure deal with Microsoft

Amsterdam-based Nebius will delivery computing resources to Microsoft using a data center in New Jersey, according to a press release. Nebius changed its name from Yandex NV last year after Russian investors bought Yandex's Russian-language search engine and other assets. Microsoft is increasingly looking to third parties to meet demand for cloud infrastructure, particularly in AI. OpenAI, one of Microsoft's top Azure cloud customers, has been searching for additional capacity as users ramp up their adoption of ChatGPT. Microsoft has also turned to CoreWeave for additional AI computing power, and OpenAI has signed a direct agreement with CoreWeave that's worth billions of dollars. CoreWeave shares were up about 5% after hours, while Microsoft shares were little changed. Nebius said it's looking at financing options to grow faster than it had planned, according to a statement. Founded in 1989, Nebius said in November that it has opened office space in San Francisco, Dallas and New York as it expands in the U.S. "Growing our presence in the US means we can be closer to our customers and support innovative American AI businesses on their journey into the future," the company wrote in a blog post at the time. Prior to the post-market pop, Nebius had already more than doubled in value this year, closing on Monday with a market cap of just over $15 billion.

Microsoft turns to Nebius in nearly $20B AI infrastructure deal - SiliconANGLE

Microsoft turns to Nebius in nearly $20B AI infrastructure deal Microsoft Corp. has signed a deal with artificial intelligence infrastructure provider Nebius Group N.V. worth up to nearly $20 billion to provide dedicated GPU infrastructure capacity from its new data center in Vineland, New Jersey, starting later this year. The deal is worth $17.4 billion over five years, with a pre-purchased option clause extending the potential value to $19.4 billion if Microsoft increases its compute demands. Nebius said it would finance the construction of its new data center and buy the necessary chips with cash flow from the deal as well as by raising debt secured against the contract. The company is also evaluating a number of additional financing options to enable significantly faster growth than originally planned and plans to update the market on its financing strategy in due course. "Nebius's core AI cloud business, serving customers from AI startups to enterprises, is performing exceptionally well. We have also said that, in addition to our core business, we expect to secure significant long-term committed contracts with leading AI labs and big tech companies," said Arkady Volozh, founder and chief executive officer of Nebius, in a statement. "I'm happy to announce the first of these contracts and I believe there are more to come. The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond." Based in Amsterdam, Nebius was spun out of Russian search giant Yandex NV in February 2023 and has since been backed by Nvidia Corp., among others. Its upcoming Vineland facility, which the company plans to roll out in phases beginning later this year and extending into 2026, is promising access to fresh, high-performance GPU capacity, making it ideal for Microsoft's growing computation needs. Not surprisingly, the news was well received by investors, with Nebius shares surging nearly 40% in late trading. This deal comes after Microsoft previously relied heavily on CoreWeave Inc. for extra GPU capacity but did not sign a comparable long-term contract and passed on the opportunity to lock in $12 billion worth of CoreWeave's GPU capacity. That capacity was subsequently snapped up by OpenAI instead. The deal also highlights how high-value contracts like the new Nebius deal are increasingly vital in the AI infrastructure supply chain as the race for AI dominance continues at full speed.

Microsoft partners with Nebius for $19.4 Billion AI cloud computing deal

Microsoft has secured a multiyear agreement with Nebius Group, valued at up to $19.4 billion, to bolster its AI cloud computing capabilities. This deal addresses Microsoft's capacity constraints amidst surging demand for AI services. Nebius will provide dedicated capacity from a new data center, significantly accelerating its AI cloud business growth. Microsoft is really going after its goals in artificial intelligence. It has signed a multiyear cloud partnership with Nebius Group NV worth up to $19.4 billion. The deal shows that even the biggest tech companies are racing to get more computing power to keep up with the growing need for AI services. Nvidia Corp. and Accel Partners are among Nebius' investors, and the company said Monday in a filing with the US Securities and Exchange Commission that the deal will be worth $17.4 billion to $19.4 billion through 2031, as per a report by Bloomberg. The deal is also a big step forward for Nebius, a Yandex spin-off that has quickly gained support from big names like Nvidia and Accel Partners. Microsoft still doesn't have enough space, even though it has spent billions on building new data centers. The need for AI services has always outpaced the growth of its infrastructure, thanks to products like Azure AI and partnerships with OpenAI. Amy Hood, the company's CFO, even said that the company expects to be "capacity constrained" until the end of this year, as per a report by Bloomberg. ALSO READ: Is Discord down? Over 90,000 users across the US affected by the outage Microsoft gets a big boost in computing power by using Nebius' resources. The company didn't say exactly how it would use the extra capacity, but the deal makes sure it has the infrastructure it needs for both its own AI development and cloud services for customers. The partnership is a huge opportunity for Nebius that will change the game. The Microsoft deal will help the company's AI cloud business grow a lot by 2026. Investors are very confident in Nebius' future because its stock has already doubled this year and went up another 50% after the announcement, as per a report by Bloomberg. It is "evaluating a number of additional financing options to enable significantly faster growth than originally planned and will update the market on its financing strategy in due course," Nebius said. The deal will be paid for with a mix of contract-backed debt and cash inflows. The company is also looking into other ways to speed up its growth. Nebius said that this growth, which is happening faster than expected, will need more money, but he thinks the Microsoft deal is a strong base, as per a report by Bloomberg. ALSO READ: iPhone 17 vs iPhone 17 Air vs Pro vs Pro Max: Rumored specs compared The Nebius partnership shows how hard Microsoft is working to stay ahead of the game in AI. The company has also made similar deals with providers like CoreWeave to cover extra demand, in addition to building its own data centers. Microsoft strengthens its ability to scale AI services and products by locking in dedicated capacity from Nebius' New Jersey facility. This guarantees that it can meet both internal needs and customer demand from around the world. What is the value of Microsoft's deal with Nebius? It will be worth between $17.4 billion and $19.4 billion by 2031. Where will Nebius give Microsoft more space? Starting later this year, from a new data center in Vineland, New Jersey.

Nebius signs $17.4 billion AI infrastructure deal with Microsoft, shares jump - The Economic Times

Nebius Group said on Monday it will provide Microsoft with GPU infrastructure capacity, in a deal worth $17.4 billion, over a five-year term, sending its shares soaring over 47% after the bell. The deal underscores the surging demand for high-performance AI compute, as companies invest heavily to bolster their AI infrastructure. Microsoft may also acquire additional services capacity under the deal, bringing the total contract value to about $19.4 billion. Nebius' core business involves providing Nvidia graphic processing units and AI cloud as services. Nebius offers AI developers the computing, storage, managed services and tools they need to build, tune and run their AI models, with the help of its cloud software architecture and in-house designed hardware. Nebius will provide Microsoft access to dedicated GPU infrastructure capacity from its new data center in Vineland, New Jersey, starting later this year. "The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond," Nebius CEO Arkady Volozh said. Microsoft is the largest customer of CoreWeave - one of Nebius' competitors - which earlier this year denied media reports that said it had seen contract cancellations from the hyperscaler. Amsterdam-based Nebius Group emerged from a deal to split the assets of Russian tech giant Yandex.

Nebius wins up to $19.4 billion data center deal with Microsoft By Investing.com

Investing.com -- Nebius entered into a commercial agreement with Microsoft to provide dedicated GPU infrastructure capacity at its new data center in Vineland, New Jersey, the company announced on Monday.. The five-year agreement, valued at approximately $17.4 billion through 2031, involves deploying GPU services in several tranches during 2025 and 2026. The contract value could increase to about $19.4 billion if Microsoft acquires additional services or capacity. Cash flow from the agreement will help finance part of the capital expenditure associated with the project. The GPU infrastructure will be delivered in multiple phases, with specific deployment timelines set for the next two years. Arkady Volozh, founder and CEO of Nebius, said: "Nebius's core AI cloud business, serving customers from AI startups to enterprises, is performing exceptionally well. We have also said that, in addition to our core business, we expect to secure significant long-term committed contracts with leading AI labs and big tech companies. I'm happy to announce the first of these contracts, and I believe there are more to come. The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond."

Nebius signs $17.4 billion AI infrastructure deal with Microsoft, shares jump

(Reuters) - Nebius Group said on Monday it will provide Microsoft with GPU infrastructure capacity, in a deal worth $17.4 billion, over a five-year term, sending its shares soaring over 47% after the bell. The deal underscores the surging demand for high-performance AI compute, as companies invest heavily to bolster their AI infrastructure. Microsoft may also acquire additional services capacity under the deal, bringing the total contract value to about $19.4 billion. Nebius' core business involves providing Nvidia graphic processing units and AI cloud as services. Nebius offers AI developers the computing, storage, managed services and tools they need to build, tune and run their AI models, with the help of its cloud software architecture and in-house designed hardware. Nebius will provide Microsoft access to dedicated GPU infrastructure capacity from its new data center in Vineland, New Jersey, starting later this year. "The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond," Nebius CEO Arkady Volozh said. Microsoft is the largest customer of CoreWeave -- one of Nebius' competitors -- which earlier this year denied media reports that said it had seen contract cancellations from the hyperscaler. Amsterdam-based Nebius Group emerged from a deal to split the assets of Russian tech giant Yandex. (Reporting by Juby Babu in Mexico City; Editing by Alan Barona)