Nebius signs multi-year AI cloud deal with Microsoft worth billions
Nebius has entered into a multi-year agreement with Microsoft to deliver dedicated AI infrastructure capacity from its new data centre in Vineland, New Jersey.
The company stated that this arrangement is valued in the multi-billion dollar range and will commence later this year. The deal forms part of Nebius's strategy to secure long-term contracts with major technology firms and is projected to significantly accelerate the firm's growth trajectory, particularly in its core AI cloud services sector in 2026 and the following years.
AI infrastructure provision
Under the new partnership, Nebius will provide Microsoft with purpose-built capacity designed to cater to its substantial AI infrastructure needs. The dedicated capacity will be operated from the company's newly established data centre in Vineland, New Jersey. This centre is expected to support a broad range of intensive artificial intelligence workloads on behalf of Microsoft's operations.
Nebius positions this contract as a cornerstone for its growth strategy. The firm has traditionally served startups and enterprises with its AI cloud platform and is now adding long-term contracts with larger industry players to its business model.
Arkady Volozh, founder and Chief Executive of Nebius, said, "Nebius's core AI cloud business, serving customers from AI startups to enterprises, is performing exceptionally well. We have also said that, in addition to our core business, we expect to secure significant long-term committed contracts with leading AI labs and big tech companies. I'm happy to announce the first of these contracts, and I believe there are more to come. The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond."
Capital expenditure plans
The company stated the capital expenditure necessary for fulfilling the contract will be funded through a combination of future cash flow generated from the agreement and issuing debt that will be secured against the contract. Nebius is also exploring additional financing options to support more rapid growth than previously anticipated and indicated it will provide further updates on its financing strategy at a later date.
Nebius highlighted that the credit quality of the counterparty, Microsoft, would help enhance the terms under which debt may be issued for this project. Details of the arrangement have been made available in the company's filing with the United States Securities and Exchange Commission.
Implications for growth
Nebius's core AI cloud business, serving customers from AI startups to enterprises, is performing exceptionally well. We have also said that, in addition to our core business, we expect to secure significant long-term committed contracts with leading AI labs and big tech companies. I'm happy to announce the first of these contracts, and I believe there are more to come. The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond.
Nebius maintains that this agreement represents a substantial milestone for its global operations. The company expects the contract to strengthen its market position in the AI infrastructure supply chain and offer it greater financial flexibility in the future.
This latest development comes as Nebius continues to expand across Europe, North America, and Israel, aiming to provide infrastructure capable of supporting various AI workloads. The company employs a combination of proprietary software and hardware in its approach to cloud infrastructure and also operates businesses in related areas such as autonomous driving and education technology.
