Nebius Signs $17.4B AI Deal with Microsoft, Shares Surge

Nebius Group, a leading AI infrastructure company based in Amsterdam, announced a major agreement with Microsoft on September 8, 2025. Under this deal, valued at approximately $17.4 billion over five years, Nebius will provide Microsoft with advanced AI computing resources starting later this year. This partnership is a significant step for both Nebius and Microsoft as the demand for powerful AI cloud infrastructure continues to rise worldwide.

The agreement will have Nebius supplying GPU (graphics processing unit) infrastructure capacity from a newly built data center located in Vineland, New Jersey. These GPUs are essential for running complex artificial intelligence models efficiently. Microsoft’s Azure cloud platform will utilize these resources to support the increased demand for AI applications, including generative AI systems like ChatGPT, which Microsoft heavily invests in.

Following the announcement, Nebius shares surged by over 47% in after-hours trading, reflecting strong investor confidence in the company’s future growth. The deal is seen as a major validation for Nebius, positioning it as a key player in the competitive AI infrastructure market. Supported by technology giants like Nvidia and venture capital firms, Nebius has been building its AI cloud business rapidly. CEO Arkady Volozh noted that this contract will help accelerate Nebius’s AI cloud growth beyond 2026 and hinted at more long-term deals on the horizon.

This partnership highlights a growing trend in the tech industry where large cloud providers such as Microsoft outsource AI infrastructure needs to specialized companies like Nebius. This approach allows hyperscalers to meet massive capacity demands without solely relying on building their own data centers. As AI technology evolves, the need for scalable, high-performance computing power continues to surge, pushing companies to innovate new financing and operational models.

Energy and power capacity constraints are also a critical challenge for data center operators. Nebius is aiming to reach 1 gigawatt of power capacity by 2026—enough to supply around 750,000 homes—to tackle these bottlenecks. Controlling energy resources is becoming an important advantage as the AI infrastructure market expands rapidly.

From a broader perspective, deals like this exemplify how AI is reshaping the cloud computing landscape. The ability to support high-demand AI workloads efficiently is crucial for tech companies competing in AI innovation and applications. Microsoft’s reliance on Nebius’s infrastructure shows the critical role niche cloud providers now play in advancing AI technology globally.

While Nebius stands to benefit greatly from the financial and strategic value of this deal, the contract also reflects wider market dynamics. The AI infrastructure market is expected to grow substantially in the coming years, with estimated spending topping $200 billion by 2028 from hyperscalers and tech firms globally. This surge demonstrates that AI is moving beyond research labs into practical, large-scale deployment requiring vast computational power.

In conclusion, Nebius’s agreement with Microsoft is more than just a business transaction; it signals the growing importance of specialized AI infrastructure companies in driving forward the AI revolution. With this multi-billion dollar deal and its strategic implications, Nebius has established itself as a significant player in the AI cloud space, while Microsoft secures the computing capability it needs to remain competitive in the fast-paced world of artificial intelligence. Both companies are poised to shape the future of AI cloud computing as demand accelerates across industries.

With inputs from agencies

Image Source: Multiple agencies