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 Nebius Group, a key player in the burgeoning artificial intelligence infrastructure sector, witnessed a significant surge in U.S. premarket trading on Tuesday. This rally followed the Amsterdam-based company’s announcement of a landmark multi-billion-dollar agreement with Microsoft.
As of 10:03 a.m. London time (05:03 a.m. E.T.), Nebius’ stock was trading up by an impressive 49%, reflecting strong investor confidence in the company’s future prospects and the strategic implications of the Microsoft partnership.
The agreement, valued at $19.4 billion, designates Nebius as a primary provider of cloud computing power specifically tailored for demanding AI workloads. This move underscores the escalating demand for specialized infrastructure capable of handling the computationally intensive tasks associated with developing and deploying advanced AI models. Nebius, formerly a division of Russian internet conglomerate Yandex until its spin-off in 2023, specializes in providing high-performance graphics processing units (GPUs), the workhorses of modern AI training.
The deal, expected to generate $17.4 billion in revenue for Nebius through 2031, highlights the company’s strategic positioning within the AI ecosystem. Notably, Nebius boasts a roster of prominent investors, including Nvidia and Accel, further solidifying its credibility and access to cutting-edge technology.
Beyond the guaranteed revenue stream, the agreement includes provisions for Microsoft to potentially acquire additional computing capacity from Nebius, indicating a flexible and scalable arrangement designed to accommodate the evolving demands of AI development. This flexibility is crucial in a field characterized by rapid technological advancements and unpredictable resource requirements.
Prior to Tuesday’s premarket surge, Nebius shares had already climbed 60% in extended trading on Monday, demonstrating sustained investor enthusiasm. The news of the Microsoft deal also triggered positive sentiment across the AI infrastructure landscape, with shares of CoreWeave, a competitor in the AI cloud computing space, experiencing a notable 6.6% increase in premarket trading. This suggests a broader recognition of the growing opportunities within the AI infrastructure market and the increasing value of companies capable of providing specialized computing solutions.
