Microsoft partners with Nebius, a leading AI-infrastructure provider, to scale GPU cloud services globally.

Nebius and Microsoft have announced a landmark agreement valued between $17.4 billion and $19.4 billion that reflects the growing demand for specialized AI infrastructure. Under the deal, Nebius will provide Microsoft with dedicated GPU infrastructure capacity at its data center in Vineland, New Jersey, spanning five years. The current contract value is $17.4 billion through 2031, with the potential to increase to $19.4 billion if Microsoft acquires additional services and capacity.

Nebius, a neocloud provider, differentiates itself through its specialized focus and pedigree. Unlike other neoclouds that emerged from cryptocurrency miners, Nebius traces its origins to the Russian tech company Yandex and was established after Yandex sold its Russian assets in 2024 following Russia's invasion of Ukraine in 2022. Since shifting its focus to the global AI market, Nebius has achieved an annualized run-rate revenue of approximately $1 billion and benefits from backing by Nvidia, which provides it priority access to the newest, high-performance GPUs. Unlike major cloud hyperscalers that serve general-purpose applications, Nebius focuses exclusively on AI and machine learning workloads, enabling more optimized datacenter design. The company also distinguishes itself from competitors such as CoreWeave by offering developer tools and services for refining AI models, running inference tasks, and developing custom solutions, rather than solely providing raw computing power. Notably, Nebius has taken the unconventional approach of proactively adding capacity before having concrete demand for those resources.

The deal presents significant financial advantages for Microsoft. By securing GPU capacity from an established AI infrastructure provider, Microsoft can accelerate its AI infrastructure development while reducing upfront capital costs and the financial risk associated with building and managing data centers independently. Rather than enduring the years required for in-house construction, Microsoft gains immediate access to the GPU capacity it needs, while Nebius assumes responsibility for building, financing, and managing the infrastructure.

The transaction also delivers substantial benefits to Nvidia, which holds both a partnership with Nebius and significant investments in the company. The deal promises increased demand for Nvidia's GPUs and potential appreciation in the value of Nvidia's Nebius holdings. This agreement reflects a broader industry trend, with CoreWeave recently extending its $11.9 billion contract with OpenAI by an additional $4 billion in May 2025, and Microsoft signing a separate $6.2 billion deal with Nscale for computing power in Norway. As major companies increasingly pursue long-term agreements with specialized neocloud providers, these firms are establishing themselves as the new industry standard for large-scale AI infrastructure.