On September 8, 2025, Nebius Group, an Amsterdam-based AI infrastructure company, announced a landmark $17.4 billion deal to supply Microsoft with GPU infrastructure capacity over a five-year term, with the potential to reach $19.4 billion if Microsoft opts for additional services. This agreement, one of the largest in the AI infrastructure sector, sent Nebius shares soaring by over 47% in after-hours trading, with some reports noting a peak surge of 60%. The deal underscores the surging demand for high-performance computing resources as tech giants race to bolster their AI capabilities.
Nebius, which emerged from a 2023 split of Russian tech giant Yandex, will provide Microsoft with dedicated GPU capacity from its new data center in Vineland, New Jersey, starting later in 2025. The company specializes in delivering Nvidia GPUs and AI cloud services, offering computing, storage, and tools for AI developers to build and run models. The agreement is expected to significantly accelerate Nebius’s AI cloud business, with CEO Arkady Volozh stating, “The economics of the deal are attractive, but significantly, it will help us accelerate growth in 2026 and beyond.” Nebius plans to finance the data center’s construction and chip purchases using cash flow from the deal and potential debt issuance.
This partnership highlights the intense competition for AI infrastructure, with Microsoft, a key player in AI through its Azure platform and OpenAI partnership, seeking to secure robust computing resources. Unlike its competitor CoreWeave, which saw a modest 5% stock increase, Nebius’s deal positions it as a major player in the AI supply chain. The contract’s scale—exceeding Nebius’s projected 2025 revenue of $625 million by nearly three times annually—has fueled optimism among investors, with some on X predicting a potential 10x growth for Nebius due to ongoing GPU supply constraints.
However, the deal also raises questions about market dynamics. Microsoft, previously CoreWeave’s largest customer, had not signed a comparable long-term contract with them, and CoreWeave denied earlier reports of contract cancellations. Nebius’s agreement could signal a strategic shift for Microsoft, possibly diversifying its AI infrastructure partners. Meanwhile, Nebius’s U.S. expansion, with offices in San Francisco, Dallas, and New York, and its doubled market cap of $15 billion in 2025, reflect its aggressive push into the American market.
Despite the enthusiasm, some analysts remain cautious. Posts on X and reports note that while Nebius benefits from current GPU shortages, its long-term viability depends on innovation beyond merely supplying Nvidia chips. The company’s additional ventures in autonomous driving (Avride) and edtech (TripleTen) may diversify its portfolio, but financial health concerns, including declining revenues and weak cash flow, persist. As the AI infrastructure race intensifies, Nebius’s ability to capitalize on this deal and secure further contracts will be critical to sustaining its meteoric rise.
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