Microsoft Secures Nearly $20 Billion AI Infrastructure Deal With Nebius to Boost GPU Capacity

Microsoft Secures Nearly $20B AI Infrastructure Deal with Nebius

Microsoft Corp. has entered into a massive agreement with AI infrastructure provider Nebius Group N.V. valued at up to nearly $20 billion. This deal will supply Microsoft with dedicated GPU infrastructure from Nebius’ new data center located in Vineland, New Jersey, starting later this year.

The initial contract is worth $17.4 billion over five years, with a pre-purchased option that could increase the value to $19.4 billion if Microsoft requires more compute power. This agreement is a clear sign of Microsoft's commitment to expanding its AI compute capabilities.

Funding and Expansion Plans

Nebius plans to finance the construction of the Vineland data center and purchase the necessary GPU chips using cash flow from the deal. Additionally, the company is exploring various financing options, including raising debt secured against the contract, to accelerate growth beyond its original plan.

Arkady Volozh, Nebius’ founder and CEO, stated that the company expects to secure additional long-term contracts with major AI labs and tech firms. He highlighted that this deal not only offers attractive economics but also sets the stage for faster growth of Nebius’ AI cloud business in 2026 and beyond.

Background on Nebius and the New Facility

Based in Amsterdam, Nebius was spun out of Russian search giant Yandex NV in February 2023. It has received backing from notable investors including Nvidia Corp. The Vineland facility will be deployed in phases starting later this year and continuing into 2026. This rollout aims to provide fresh, high-performance GPU capacity, which aligns well with Microsoft’s increasing computation needs.

Market and Industry Implications

Investors responded positively, with Nebius shares jumping nearly 40% in late trading. This contract follows Microsoft’s previous reliance on CoreWeave Inc. for additional GPU capacity, where Microsoft did not secure a long-term deal. CoreWeave’s capacity was later acquired by OpenAI.

This deal underscores how critical large, long-term contracts have become in the AI infrastructure supply chain as companies race to meet growing AI development demands.

• Deal Value: $17.4 billion over five years, potentially rising to $19.4 billion
• Location: Vineland, New Jersey data center
• Provider: Nebius Group N.V.
• Backing: Nvidia and others

For IT professionals and developers looking to understand AI infrastructure growth and procurement strategies, this deal highlights the increasing importance of dedicated GPU resources and long-term partnerships in supporting AI workloads.

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