The Dutch company Nebius Group N.V., specialized in infrastructure for artificial intelligence, has announced a historic deal with Microsoft valued at $17.4 billion, extendable by another $2 billion if Redmond’s tech giant makes use of additional capabilities. The multi-year agreement establishes Nebius as a top-tier strategic partner in the global race for AI cloud dominance.
A Five-Year Contract from New Jersey
According to the company, Nebius will start delivering dedicated capacity to Microsoft starting late 2025, relying on its new data center in Vineland, New Jersey. The facility will be equipped with state-of-the-art GPUs, the key hardware enabling the training and deployment of large-scale AI models, solidifying NVIDIA’s position as the dominant supplier in this sector.
The deployment will happen in phases, and the initial contract will last for five years. To finance the substantial capital expenditure, Nebius will leverage a combination of debt issuance secured by the contract itself and the cash flows generated from the Microsoft agreement.
Market Reaction: Record Gains
The announcement caused Nebius’s shares to soar in pre-market trading, rising by 44% to reach $92.49 per share. Investors see this contract as a definitive boost to the company’s positioning in the booming global AI infrastructure market.
Arkady Volozh, founder and CEO of Nebius, emphasized in his statement:
“Our core AI cloud business, serving clients from startups to large corporations, is performing exceptionally well. This deal, beyond its financial appeal, will allow us to accelerate growth even further in 2026 and beyond.”
Microsoft Strengthens Its AI Muscle
For Microsoft, this deal arrives at a pivotal moment. The company needs to secure stable and reliable capacity to sustain the growth of its AI-powered services, from Azure AI to Copilot, in a highly competitive environment against Amazon, Google, and other hyperscalers.
The move also reinforces its strategy to diversify infrastructure providers and avoid reliance solely on chip manufacturers or in-house data centers.
From Yandex to Global Player: Nebius’s Rise
Nebius was born after the separation of Yandex’s operations in Russia, and has rapidly established itself as a global AI infrastructure provider. Headquartered in Amsterdam with R&D centers across Europe, North America, and Israel, the company has built a native AI platform with hardware and software developed in-house.
Beyond its main business, Nebius participates in parallel projects under brands like Avride (autonomous vehicles), TripleTen (edtech), and holds stakes in companies such as ClickHouse and Toloka.
Context: Enormous Investments in AI Cloud Infrastructure
The agreement comes at a time of unprecedented investments in AI infrastructure. Large models require computational, storage, and networking capabilities that surpass any previous era of technological development.
Initiatives like the Stargate Project, with a planned investment of $500 billion, illustrate the scale of this global race. Although the Nebius-Microsoft deal is smaller in scale, it confirms that securing computing capacity is today one of the industry’s most strategic fronts.
FAQs
What is the total value of the deal between Nebius and Microsoft?
The agreement is valued at $17.4 billion, with an option to extend by $2 billion.
Where will Nebius’s infrastructure for Microsoft be deployed?
At the new Vineland data center in New Jersey, which is set to start operations at the end of 2025.
How will Nebius fund the necessary investment?
Through a combination of debt issuance backed by the contract and cash flow from Microsoft payments.
What does this deal mean for the AI market?
It confirms Nebius’s consolidation as a key provider in AI infrastructure and strengthens Microsoft’s position in its race against other tech giants.
via: Nebius