Nebius Group NV (NBIS.US) saw its share price jump 48-50% before Wall Street opened after announcing an agreement with Microsoft (MSFT.US) to provide GPU computing power for artificial intelligence. The five-year contract, worth at least $17.4 billion with an option to extend to $19.4 billion, provides for the provision of resources from a new data center in Vineland, New Jersey, to Microsoft's infrastructure. The agreement is crucial for Microsoft's AI chip, which is struggling with a shortage of computing power despite record investments in the expansion of its own data centers.
The agreement is “transformational” for Nebius' business model, which is on track to reach $1 billion in annual revenue in 2025 and could grow to $3.5-3.9 billion thanks to the contract. The expansion will be financed through a combination of contract revenues and debt secured by the contract. Microsoft, whose main goal is to supplement the computing power needed to train and run AI models, has not disclosed details, but this collaboration significantly increases the scale and pace of Nebius' cloud business development.
Analysts emphasize that the agreement confirms Nebius' leading position as a player in the neocloud segment, competing even with the largest public cloud providers. They also predict that the company will acquire more large customers in the AI sector and will implement an ambitious plan to expand its cloud infrastructure. The contract with Microsoft is a significant turning point for the company after its separation from Russia's Yandex and its transformation into a European AI cloud provider.
If the company's shares maintain their growth momentum in pre-market trading, they will reach new historic highs today. Source: xStation
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