This article first appeared on GuruFocus.
Nvidia (NVDA)-backed Nebius Group (NASDAQ:NBIS) said Monday it reached a $17.4 billion agreement to provide Microsoft (NASDAQ:MSFT) with GPU infrastructure capacity, sending its shares up more than 47% in after-hours trading.
The five-year contract, which could increase to $19.4 billion if Microsoft opts for additional services, underscores rising demand for high-performance computing to support artificial intelligence development.
Nebius, which provides Nvidia-based GPUs and AI cloud services, will supply Microsoft from a new data center in Vineland, New Jersey, beginning later this year. The company said the partnership will accelerate growth of its AI cloud business into 2026 and beyond.
Microsoft has also been expanding partnerships with other GPU providers, including CoreWeave, one of Nebius’ rivals.
Amsterdam-based Nebius was formed out of a restructuring of Russian technology firm Yandex.
Investors will watch for updates on the rollout of the Vineland data center and the pace of AI cloud adoption in the coming quarters.
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