Artificial intelligence infrastructure firm Nebius soared in U.S. pre-market trading on Monday following the announcement of a multi-billion-dollar deal with Microsoft. The Amsterdam-based firm’s stock rose 55% at around 1:20 p.m. ET.
Nebius had announced it had struck a multi-year deal with Microsoft worth $17.4 billion to provide cloud computing power for AI workloads. The deal will be worth $17.4 billion through 2031 to Nebius, which counts Nvidia and Accel as its investors. Microsoft may also acquire additional computing capacity under the arrangement.
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Nebius shares climbed 60% Monday in extended trading and continued to surge Tuesday amid investor excitement over the deal. The news also boosted shares of rival AI infrastructure firm CoreWeave which was up 6.6% in premarket trading.
Nebius, which was spun out of Russian internet giant Yandex, provides graphic processing units and AI cloud as services. The company offers AI developers the computing, storage, managed services and tools they need to build, tune and run their AI models, with the help of its cloud software architecture and in-house designed hardware.
Starting later this year, Microsoft access to dedicated GPU infrastructure capacity from its new data center in Vineland, New Jersey. “The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond,” Nebius CEO Arkady Volozh said.
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A deal like this seems to have come at the right time for Microsoft. CFO Amy Hood said the company was still struggling with capacity shortages in July that were expected to continue until the end of 2024. Demand for AI services continues to exceed capacity, despite record investments in new data centers.
Microsoft had previously entered into similar deals with companies like CoreWeave. It also has a contract to provide AI computing power to ChatGPT’s creator OpenAI. The collaboration with Nebius should help solve these capacity issues.
Meanwhile, in August, Nvidia, the biggest name in the AI infrastructure space, reported better-than-expected earnings and revenue for the three months through June and said it expects sales growth for the current quarter to remain above 50%, amid continued demand for its AI chips. Chief Financial Officer Colette Kress said in the company’s earnings call at the time that it expects between $3 trillion and $4 trillion in AI infrastructure spending by the end of the decade.