Microsoft signs $17.4B AI infrastructure deal with Nebius Group

Nebius Group has signed a $17.4 billion deal to provide Microsoft with GPU infrastructure capacity over five years, marking one of the largest AI infrastructure partnerships to date. The agreement underscores the massive capital investments tech giants are making to secure computing power for generative AI development, with Nebius shares surging 33% in after-hours trading following the announcement.

What you should know: This represents a significant strategic partnership between Microsoft and Nebius, an AI infrastructure specialist formerly known as Yandex’s international business.
• The five-year agreement is valued at $17.4 billion, positioning it among the largest AI infrastructure deals in the industry.
• Nebius will provide GPU infrastructure capacity to support Microsoft’s expanding AI operations and cloud services.
• The deal reflects Microsoft’s continued efforts to secure reliable computing infrastructure as it scales its AI offerings across Azure and other services.

Market reaction: Investors responded enthusiastically to the partnership announcement, driving significant gains in Nebius stock.
• Nebius shares jumped 33% in after-hours trading immediately following the deal’s disclosure.
• The market response highlights investor confidence in AI infrastructure companies securing long-term enterprise contracts.

The big picture: The partnership exemplifies the intense competition among tech companies to develop increasingly sophisticated generative AI technology.
• Demand for data centers and GPU infrastructure has surged as businesses race to build more advanced AI capabilities.
• Major cloud providers like Microsoft are securing long-term infrastructure partnerships to ensure they have adequate computing power to meet growing AI workloads.
• The deal positions Nebius as a key infrastructure provider in the global AI ecosystem, particularly for one of the world’s largest cloud computing platforms.