Nebius, which was spun out from Russian internet giant Yandex, provides graphics processing units or GPUs for training artificial intelligence models.
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Shares of artificial intelligence infrastructure firm Nebius Group soared nearly 50% Tuesday, a day after the company disclosed a multi-billion-dollar deal with Microsoft.
The Amsterdam-based firm announced it had struck a multi-year deal with Microsoft worth up to $19.4 billion to provide cloud computing power for AI workloads. Nebius, which was spun out from Russian internet giant Yandex in 2023, provides graphics processing units — or GPUs — for training AI models.
The deal will be worth $17.4 billion through 2031 to Nebius, which counts the likes of Nvidia and Accel as investors. Microsoft may also acquire additional computing capacity under the arrangement, boosting overall contract value to $19.4 billion.
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 8%.
The Nebius-Microsoft pact suggests demand for powerful computing equipment needed to train and run advanced AI systems remains strong.
Last month, Nvidia, the biggest player 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.
Nvidia 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.
Markets were rattled last month after OpenAI CEO Sam Altman and a number of experts and analysts raised concerns that the AI market may be in a bubble.
Valuations of private AI companies have soared in the last three years. OpenAI is reported to be fetching a $500 billion valuation, while Anthropic last week secured a $13 billion funding round at a $183 billion valuation.
