Nebius Group Shares Soar on $17.4-19.4 Billion AI Deal with Microsoft

Nebius Group NV, formerly known as Yandex NV, saw its shares skyrocket by as much as 60% in after-hours trading following the announcement of a major artificial intelligence (AI) infrastructure agreement with Microsoft. The multi-billion-dollar deal, valued between $17.4 billion and $19.4 billion through 2031, marks a significant milestone for the company in the rapidly expanding AI market.

Deal Details

Under the terms of the agreement, Nebius will provide Microsoft with AI-related computing resources from a new data center located in Vineland, New Jersey. The infrastructure delivery is set to commence later this year, positioning Nebius as a key player in supporting Microsoft's growing AI initiatives.

Strategic Implications

This partnership represents Nebius' first long-term contract with a major technology company, potentially paving the way for future collaborations. The company has hinted at the likelihood of securing additional deals, suggesting a strong growth trajectory in the AI infrastructure space.

Microsoft's AI Strategy

The agreement aligns with Microsoft's strategy of partnering with third-party providers to meet the surging demand for AI cloud infrastructure. This demand has been particularly driven by the widespread adoption of ChatGPT, developed by OpenAI, which has close ties to Microsoft.

Financial Impact

The deal is expected to significantly boost Nebius' AI cloud business growth, with the most substantial impact anticipated from 2026 onwards. To support this expansion, Nebius plans to fund the associated capital expenditures through a combination of proceeds from the deal and secured debt.

Market Response

Investors responded enthusiastically to the news, with Nebius Group NV shares initially surging by up to 60% in extended trading. While the gains moderated slightly, the stock still traded 42% higher after hours, reflecting strong market confidence in the company's future prospects.

Company Background

Nebius Group NV, which changed its name from Yandex NV last year, boasts backing from industry giants Nvidia and venture capital firm Accel Partners. This latest deal further solidifies its position in the competitive AI infrastructure market.

As the AI sector continues to evolve rapidly, the partnership between Nebius and Microsoft underscores the growing importance of robust infrastructure to support advanced AI applications and services. With this landmark agreement, Nebius Group NV has positioned itself as a significant player in the AI infrastructure landscape, potentially setting the stage for further growth and partnerships in the coming years.