Spinned out of Russian internet giant Yandex, Nebius offers a graphics processing unit or GPU to train artificial intelligence models.
SOPA Images | Lightrocket | Getty Images
Inventory of AI infrastructure companies Nebius Group It rose 40% on Tuesday the day after the company disclosed its multi-billion dollar contract. Microsoft.
The Amsterdam-based company has announced that it has signed a multi-year agreement with Microsoft worth up to $19.4 billion to provide cloud computing power to its AI workloads. Nebius was spin-out from Russian internet giant Yandex in 2023 and will provide a Graphic Processing Unit (GPU) to train AI models.
The deal is worth $17.4 billion through 2031. This counts Nvidia and Accel as investors. Microsoft will acquire additional computing power under the arrangement and increase the overall contract value to $19.4 billion.
Nebius’ shares rose 60% on Monday in extended trading and continued to surge on Tuesday amidst investors’ excitement. The news also boosted stocks of rival AI infrastructure companies coreweavean increase of 8%.
Nebius-Microsoft Pact suggests that there is still a strong demand for the powerful computing equipment needed to train and run advanced AI systems.
Last month, Nvidia, the biggest player in the AI infrastructure sector, reported better revenue and revenue than expected for the three months to June, saying it expects sales growth to exceed 50% this quarter amid ongoing demand for AI chips.
Colette Kress, Nvidia’s chief financial officer, said in the company’s revenue call at the time, which is expected to be between $3 trillion and $4 trillion in AI infrastructure spending by the end of the decade.
The market has been rattled last month after Openai CEO Sam Altman and many experts and analysts raised concerns that the AI market could be in a bubble.
The valuation of private AI companies has skyrocketed over the past three years. Openai is reportedly valued at $500 billion, but last week humanity secured $13 billion in funding at $183 billion valuation.
