September 8, 2025, based in Amsterdam, Nebius Group announced it had signed a five‑year AI infrastructure agreement with Microsoft valued at up to $17.4 billion. Upon the announcement, Nebius shares surged more than 47% in U.S. after‑hours trading, marking the largest one‑day gain in the recent period. The agreement not only highlights the explosive growth in AI compute demand but also reinforces Nebius’s position as an emerging AI cloud services provider. Notably, NVIDIA, a strategic investor in Nebius, had earlier invested $60 million to support its GPU infrastructure expansion; that endorsement further amplified market confidence and helped drive the post‑announcement stock rally.
Nebius Group traces its origins to assets carved out from Russian tech giant Yandex. In 2024, Yandex separated its international operations amid geopolitical pressures, and Nebius became an independent operator focused on AI cloud infrastructure. The company’s core businesses include providing NVIDIA graphics processing units (GPUs) and AI cloud services to help developers build, fine‑tune and run AI models. Its cloud software architecture and self‑designed hardware systems have helped Nebius stand out in high‑performance computing. According to company financials, Nebius’s AI cloud business grew at very high speed in the first half of 2025, with revenue doubling year‑on‑year, in part thanks to NVIDIA’s strategic investment.
NVIDIA’s stake was a key inflection point for Nebius. In early 2025, NVIDIA announced a $60 million investment in Nebius for an equity position. The investment was part of NVIDIA’s broader push into the “neocloud” ecosystem. NVIDIA also holds a larger stake in competitor CoreWeave, but Nebius’s strengths include its global data center footprint and penetration into Asian markets. NVIDIA CEO Jensen Huang publicly praised Nebius’s “efficient GPU cluster design” at the 2025 GTC conference, calling it “the future of AI infrastructure.” The investment not only provided capital and technical support but also opened doors to high‑end customers. Seeking Alpha noted that NVIDIA’s endorsement boosted Nebius’s valuation premium, helping it stand out among AI startups. Nebius’s stock had nearly doubled in the first half of 2025, partly due to this strategic alliance.
Details of the Microsoft agreement further underscored Nebius’s competitiveness. Reuters reported that Nebius will supply dedicated GPU infrastructure capacity to Microsoft, beginning at Nebius’s Vineland, New Jersey data center later this year. That center is Nebius’s latest project, with total investment exceeding $2 billion and housing thousands of NVIDIA H100 and Blackwell GPUs to support large‑scale AI training and inference. The deal’s base value is $17.4 billion, and Microsoft has the right to purchase additional capacity, potentially raising the contract’s total value to $19.4 billion. That sum equals multiple years of expected Nebius revenue, far exceeding its full‑year 2024 revenue (about $1.5 billion).
Nebius CEO Arkady Volozh said in a statement: "The economics of this agreement are highly attractive, but more importantly, it will accelerate growth in our AI cloud business, especially in 2026 and beyond." Volozh emphasized that Nebius’s cloud platform delivers compute, storage, management services and tools that align with Microsoft’s AI strategy. As a leading AI player, Microsoft is expanding AI capabilities through its Azure cloud platform; this agreement will help it meet the compute needs of partners such as OpenAI. Microsoft is also a major customer of CoreWeave, which previously denied media reports of contract cancellations, but Nebius’s deal clearly provides additional options.
Market reaction was swift. After the U.S. close on September 8, Nebius (Nasdaq: NBIS) shares jumped from $16.50 to $24.30, up 47.3%, with trading volume soaring to 5 million shares, well above average. The surge reflected investor optimism about the agreement and the so‑called halo effect from NVIDIA’s investment. Yahoo Finance noted Nebius’s price‑to‑sales ratio reached 68x, above the industry average, but its growth prospects underpinned the valuation. Goldman Sachs, in a July 2025 report, listed Nebius as a "buy" with a $35 target price, citing NVIDIA’s backing and the ongoing AI demand wave.
The agreement comes amid a red‑hot AI infrastructure market. In 2025, global AI compute demand is projected to triple, leaving NVIDIA GPUs in short supply. Through its investment, Nebius secured priority access to supply and expanded data center footprints in Asia and Europe. In June, Nebius announced $1 billion in debt financing for global expansion, including in Asian markets; the financing was led by institutions including Goldman Sachs and further strengthened its balance sheet. Compared with peers such as CoreWeave (valued in the tens of billions), Nebius emphasizes cost control—its data centers reportedly achieve energy efficiency about 20% better than the industry average, a factor that helped win Microsoft’s evaluation.
Nevertheless, Nebius faces challenges. As a spin‑off from Yandex, its Russian origins raised geopolitical risk concerns, but Volozh’s team has fully pivoted to international operations to avoid sanctions exposure. In Q2 2025, Nebius returned to profitability with net income of $50 million, indicating a strong recovery. Investors should note that the AI market is volatile and rising NVIDIA GPU prices could squeeze margins. Ongoing NVIDIA support—including technical collaboration and potential further investments—provides some buffer.
From a broader perspective, the deal highlights deepening integration across the AI ecosystem. Microsoft gains supplemental compute capacity to ease pressure on its own data centers, while NVIDIA’s investment helps lock downstream demand, creating a closed loop. A Visive AI report predicts that NVIDIA‑backed AI stocks like Nebius could lead the market in 2025, with potential returns exceeding 100%. For investors, this is not only a short‑term surge story but also a reflection of long‑term trends in AI infrastructure.
In short, Nebius’s $17.4 billion agreement with Microsoft, together with NVIDIA’s $60 million stake, marks a leap from an emerging player toward industry‑scale status. The 47% after‑hours rally was both a market reaction to the news and a sign of the broader AI infrastructure competition. As the Vineland data center comes online, Nebius’s AI cloud business could see a major expansion and will remain closely watched.