Nebius Strikes Historic Microsoft Deal, Sends Shockwaves Across AI Market

Amsterdam / New Jersey, September 8, 2025 — Nebius Group NV, a little-known European spinout just two years ago, has become the centerpiece of Wall Street conversation after announcing its blockbuster agreement with Microsoft to provide GPU infrastructure capacity worth $17.4 billion over five years, expandable to $19.4 billion if demand rises, reported by Reuters.

The deal will be anchored in Nebius’s new Vineland, New Jersey data center, scheduled to deliver GPU capacity later this year. It’s a monumental leap for a company that only recently emerged from Yandex’s international carve-out. The announcement set off a frenzy in markets: shares soared by 33% according to Reuters, with some estimates placing the spike at nearly 70%, underscoring how hungry investors are for credible AI infrastructure players.

Nebius CEO Arkady Volozh hailed the agreement as “transformative,” noting that its economics are lucrative on their own but more importantly create a springboard for Nebius’s AI cloud ambitions. The company plans to fund the Vineland expansion via deal-related cash flows and debt secured against the Microsoft contract, minimizing dilution and maximizing scale.

The strategy underscores a new dynamic in the AI race: Microsoft gains GPU power without building another expensive data center, while Nebius gains validation as a trusted supplier. It’s a symbiosis with echoes of the cloud wars of a decade ago – except this time, GPUs are the scarce weaponry.

Founded in 2023 and staffed by veterans across regions, Nebius is no longer a fringe player. With subsidiaries like Avride and TripleTen and stakes in platforms such as Toloka and ClickHouse, it is building a diversified AI ecosystem. Analysts say this contract vaults Nebius into the rarefied air occupied by companies like CoreWeave, positioning it as Europe’s most significant challenger in the AI compute sector.

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