Nebius shares exploded 49% in premarket trading after the AI infrastructure firm announced a blockbuster $19.4 billion multi-year deal with Microsoft. The Amsterdam-based company, spun out from Russian internet giant Yandex in 2023, will provide cloud computing power and GPU resources for Microsoft's AI workloads through 2031. The massive contract underscores the fierce competition for AI compute capacity as tech giants race to scale their artificial intelligence operations.
The AI infrastructure gold rush just claimed its biggest prize yet. Nebius Group, the Amsterdam-based GPU provider spun out from Russian internet giant Yandex, sent shockwaves through Wall Street Tuesday morning as shares rocketed 49% higher on news of a massive $19.4 billion deal with Microsoft.
The multi-year agreement, worth $17.4 billion to Nebius through 2031, highlights the desperate scramble for AI computing power as tech giants pour billions into artificial intelligence infrastructure. Microsoft gains access to Nebius's graphics processing units and cloud computing capacity to power its expanding AI workloads, while potentially securing additional capacity under the arrangement.
"This is exactly the type of deal that validates the entire AI infrastructure thesis," said one Wall Street analyst who requested anonymity. The partnership comes as Microsoft faces intense pressure to scale its AI capabilities following its massive investment in OpenAI and the competitive threat from rivals like Google and Amazon.
Nebius's meteoric rise reflects the premium investors are placing on AI infrastructure plays. The company's stock had already climbed 60% in Monday's extended trading before Tuesday's premarket surge, creating a two-day gain that has essentially doubled the stock price. The frenzy spread to competitors, with CoreWeave shares jumping 6.6% in sympathy.
The deal's structure reveals Microsoft's strategic thinking around AI compute. Rather than building massive data centers from scratch, the tech giant is partnering with specialized providers like Nebius to quickly scale capacity. This approach mirrors Amazon's recent partnerships and Google's cloud infrastructure investments, suggesting the entire industry is racing to lock up GPU resources.
Nebius brings unique advantages to the partnership. Spun out from Yandex in 2023, the company inherited sophisticated AI infrastructure capabilities and counts and venture firm Accel among its investors. The Yandex connection, while potentially controversial given Russian ties, has provided Nebius with battle-tested technology for handling massive AI workloads.
