TLDR: Nebius Group N.V. has announced a significant $17.4 billion deal with Microsoft Corp. to provide GPU infrastructure capacity over a five-year period, with the potential to expand to $19.4 billion. The agreement, effective from late 2025, is expected to accelerate Nebius’ AI cloud business growth and led to a substantial surge in its stock.
Amsterdam-based Nebius Group N.V., a prominent provider of computing power and a spinoff of Russian tech giant Yandex, has entered into a monumental agreement with Microsoft Corp. The deal, valued at $17.4 billion over a five-year term, will see Nebius supply Microsoft with crucial GPU infrastructure capacity for its artificial intelligence operations. This partnership has the potential to increase in value to over $19.4 billion through 2031, according to SEC filings.
The announcement, made on September 8, 2025, sent Nebius’ shares soaring by more than 60% in extended trading sessions. The company anticipates that this multi-billion dollar contract will significantly accelerate the growth of its AI cloud business, particularly in 2026 and beyond. Nebius plans to deliver the dedicated capacity from its new data center located in Vineland, New Jersey, with operations commencing in late 2025. The company aims to achieve 1 GW capacity by 2026, including 220 MW of connected power (active or ready for GPU deployment), with 100 MW of active power.
Financially, Nebius expects to fund the capital expenditure associated with this contract through a combination of cash flow generated from the deal and the issuance of debt, secured against the contract. The favorable credit quality of Microsoft is expected to enhance the terms of this financing. Nebius is also exploring additional financing options to support a faster growth trajectory than initially projected, with updates to the market expected in due course.
Also Read:
- Artificial Intelligence References Surge in S&P 500 Earnings Calls, Driving Market Trends
- Microsoft Unveils Extensive AI Education Initiatives in Collaboration with White House
This agreement underscores Microsoft’s ongoing commitment to scaling its AI infrastructure, particularly through its Azure cloud platform. Microsoft continues to drive cloud leadership with Azure and is rapidly expanding its AI capabilities, reinforced by its deep partnership with OpenAI and the integration of AI features across its product suite, including Office, GitHub, and Dynamics. The company has also been actively involved in unveiling new AI advancements in collaboration with NVIDIA, such as NVIDIA NIM microservices in Azure AI Foundry and improved inference for open-source models.
