Another day, another huge artificial intelligence (AI) infrastructure deal.
Oracle Corp. isn’t the only tech pioneer cashing in on the AI Gold Rush: Nebius Group has signed a deal worth as much as $19.4 billion with Microsoft Corp. to provide the software giant dedicated AI computing capacity worth at least $17.4 billion through 2031. The agreement includes options that could increase its value by another $2 billion, Nebius said.
“We expect to secure significant long-term committed contracts with leading AI labs and big tech companies,” Nebius CEO Arkady Volozh said in a separate statement. “I’m happy to announce the first of these contracts, and I believe there are more to come.”
Nebius, which is financially backed by NVIDIA Corp. and venture capital firm Accel Partners, had until recently worked primarily with startups and smaller businesses on AI cloud infrastructure. The Amsterdam-based said it will provide Microsoft dedicated capacity from a new data center in Vineland, N.J., beginning later this year.
Microsoft, like every major AI player, is badly in need of beefing up AI cloud computing capacity. To that end, the company has ramped up capital spending on building new data centers to record levels in recent years to meet soaring demand for AI services. In July, the company said it planned to invest a record high of more than $30 billion in capital expenditures in the current quarter.
Still, Microsoft Chief Financial Officer Amy Hood told investors in July that the company expected “to remain capacity constrained” through the end of 2025.
Microsoft has frequently faced capacity constraints that limit its ability to meet internal demands, particularly for AI product development and delivering Azure AI services to customers. The company is also committed to supplying computational resources to OpenAI for ChatGPT operations, while simultaneously seeking additional capacity through partnerships with external providers such as CoreWeave Inc.
