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Nebius Joins the AI Elite After a $17.4 Billion Microsoft Pact
Written by Jeffrey Neal Johnson. Published 9/11/2025.
Key Points
- The multi-year agreement with Microsoft provides Nebius with an immense, long-term revenue stream that fundamentally reshapes its entire financial future.
- Securing this landmark partnership with a technology giant serves as the ultimate validation of Nebius's proprietary full-stack AI infrastructure platform.
- The company is strategically raising capital from a position of strength to fund the hyper-growth required to meet its new large-scale commitments.
In a market move that captured the attention of the entire technology sector, shares of artificial intelligence (AI) infrastructure provider Nebius Group (NASDAQ: NBIS) soared 49.42% on September 9, closing at $95.72 on extraordinarily high trading volume.
More than 88 million shares changed hands—nearly nine times its daily average—signaling intense investor conviction. For a stock already up 245% year to date, this single-day surge served as a powerful affirmation of market sentiment.
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The catalyst was a multi-year, $17.4 billion agreement with Microsoft (NASDAQ: MSFT). Far more than just another large contract, this deal reshapes Nebius's financial outlook and cements its role as a key force in global AI infrastructure.
Inside the Multi-Billion-Dollar Handshake
According to the official announcement, Microsoft committed $17.4 billion for Nebius to supply dedicated GPU cloud infrastructure—the high-powered computing essential for training and running advanced AI models. The agreement also includes a $2 billion option for additional services or capacity, potentially raising the total value to $19.4 billion.
The partnership runs through 2031, giving Nebius a clear, stable revenue stream for nearly a decade. To fulfill the contract, Nebius will leverage its new, purpose-built data center in Vineland, New Jersey, solidifying a significant U.S. operational footprint.
To put the contract's scale in perspective, its base value exceeded Nebius's previous market capitalization of about $15.1 billion the day before the news broke. It also dwarfs the company's own 2025 annualized run rate (ARR) guidance of $900 million to $1.1 billion, providing a backlog that fundamentally alters Nebius's financial trajectory.
Earning a Seat at the Cool Kids' Table
Beyond the staggering financials, the strategic significance of this deal is profound. For an emerging player like Nebius, landing a hyperscaler contract of this magnitude is the ultimate endorsement of its full-stack platform, which integrates proprietary software with in-house hardware to deliver high-performance AI compute.
This victory follows a strong second-quarter earnings report, where the core AI business achieved positive Adjusted EBITDA ahead of schedule, demonstrating that Nebius's operational model was already gaining traction.
The partnership marks a pivotal shift in the AI supply chain, elevating Nebius into the top echelon of independent infrastructure providers. Notably, competitors like CoreWeave (NASDAQ: CRWV) saw a more modest 7.1% gain on the same day, underscoring that investors viewed this announcement as a company-specific catalyst rather than a broad sector tailwind.
Nebius's established relationship with NVIDIA (NASDAQ: NVDA)—a prior investor and the leader in AI hardware—adds another layer of credibility that likely influenced Microsoft's decision.
Capitalizing on an Unprecedented Opportunity
In a swift response to its new obligations, Nebius announced a dual offering to raise fresh capital: a $1 billion public sale of Class A shares and a $2 billion private placement of convertible senior notes. Far from a distress signal, this proactive strategy aims to fund hypergrowth.
With $1.68 billion in cash at the end of Q2, Nebius is raising capital from a position of strength. The proceeds are earmarked for hardware acquisition and data center expansion needed to meet its commitments.
The company also plans to secure part of the financing with debt backed by the Microsoft contract itself. By leveraging Microsoft's high credit rating, Nebius can likely access favorable borrowing terms and scale more cost-effectively.
From Potential to Performance
The landmark agreement with Microsoft has de-risked Nebius's investment thesis, shifting the narrative from high potential to proven, large-scale performance recognized by one of the world's largest tech firms.
Investors' attention will now focus on execution: the timely build-out of the New Jersey data center and the successful deployment of capacity for Microsoft will be the critical metrics in the coming quarters.
Analysts are already revising their outlooks. BWS Financial has raised its price target on NBIS to $130 following the announcement.
This transformative contract provides a stable foundation for Nebius's ambitious growth targets, including securing more than 1 GW of power by the end of 2026. For investors, this deal solidifies Nebius's status as a critical player in the AI infrastructure market.
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