Microsoft is really going after its goals in artificial intelligence. It has signed a multiyear cloud partnership with Nebius Group NV worth up to $19.4 billion. The deal shows that even the biggest tech companies are racing to get more computing power to keep up with the growing need for AI services.
Nvidia Corp. and Accel Partners are among Nebius' investors, and the company said Monday in a filing with the US Securities and Exchange Commission that the deal will be worth $17.4 billion to $19.4 billion through 2031, as per a report by Bloomberg.
The deal is also a big step forward for Nebius, a Yandex spin-off that has quickly gained support from big names like Nvidia and Accel Partners.
Microsoft still doesn't have enough space, even though it has spent billions on building new data centers. The need for AI services has always outpaced the growth of its infrastructure, thanks to products like Azure AI and partnerships with OpenAI. Amy Hood, the company's CFO, even said that the company expects to be "capacity constrained" until the end of this year, as per a report by Bloomberg.
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Microsoft gets a big boost in computing power by using Nebius' resources. The company didn't say exactly how it would use the extra capacity, but the deal makes sure it has the infrastructure it needs for both its own AI development and cloud services for customers.
The partnership is a huge opportunity for Nebius that will change the game. The Microsoft deal will help the company's AI cloud business grow a lot by 2026. Investors are very confident in Nebius' future because its stock has already doubled this year and went up another 50% after the announcement, as per a report by Bloomberg.
It is “evaluating a number of additional financing options to enable significantly faster growth than originally planned and will update the market on its financing strategy in due course,” Nebius said.
The deal will be paid for with a mix of contract-backed debt and cash inflows. The company is also looking into other ways to speed up its growth. Nebius said that this growth, which is happening faster than expected, will need more money, but he thinks the Microsoft deal is a strong base, as per a report by Bloomberg.
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The Nebius partnership shows how hard Microsoft is working to stay ahead of the game in AI. The company has also made similar deals with providers like CoreWeave to cover extra demand, in addition to building its own data centers.
Microsoft strengthens its ability to scale AI services and products by locking in dedicated capacity from Nebius' New Jersey facility. This guarantees that it can meet both internal needs and customer demand from around the world.
It will be worth between $17.4 billion and $19.4 billion by 2031.
Where will Nebius give Microsoft more space?
Starting later this year, from a new data center in Vineland, New Jersey.
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Nvidia Corp. and Accel Partners are among Nebius' investors, and the company said Monday in a filing with the US Securities and Exchange Commission that the deal will be worth $17.4 billion to $19.4 billion through 2031, as per a report by Bloomberg.
The deal is also a big step forward for Nebius, a Yandex spin-off that has quickly gained support from big names like Nvidia and Accel Partners.
Why does Microsoft need Nebius to power AI in the cloud?
Microsoft still doesn't have enough space, even though it has spent billions on building new data centers. The need for AI services has always outpaced the growth of its infrastructure, thanks to products like Azure AI and partnerships with OpenAI. Amy Hood, the company's CFO, even said that the company expects to be "capacity constrained" until the end of this year, as per a report by Bloomberg.
ALSO READ: Is Discord down? Over 90,000 users across the US affected by the outage
Microsoft gets a big boost in computing power by using Nebius' resources. The company didn't say exactly how it would use the extra capacity, but the deal makes sure it has the infrastructure it needs for both its own AI development and cloud services for customers.
How will this deal affect Nebius's growth?
The partnership is a huge opportunity for Nebius that will change the game. The Microsoft deal will help the company's AI cloud business grow a lot by 2026. Investors are very confident in Nebius' future because its stock has already doubled this year and went up another 50% after the announcement, as per a report by Bloomberg.
It is “evaluating a number of additional financing options to enable significantly faster growth than originally planned and will update the market on its financing strategy in due course,” Nebius said.
The deal will be paid for with a mix of contract-backed debt and cash inflows. The company is also looking into other ways to speed up its growth. Nebius said that this growth, which is happening faster than expected, will need more money, but he thinks the Microsoft deal is a strong base, as per a report by Bloomberg.
ALSO READ: iPhone 17 vs iPhone 17 Air vs Pro vs Pro Max: Rumored specs compared
What does this mean for Microsoft's plans for AI?
The Nebius partnership shows how hard Microsoft is working to stay ahead of the game in AI. The company has also made similar deals with providers like CoreWeave to cover extra demand, in addition to building its own data centers.
Microsoft strengthens its ability to scale AI services and products by locking in dedicated capacity from Nebius' New Jersey facility. This guarantees that it can meet both internal needs and customer demand from around the world.
FAQs
What is the value of Microsoft's deal with Nebius?It will be worth between $17.4 billion and $19.4 billion by 2031.
Where will Nebius give Microsoft more space?
Starting later this year, from a new data center in Vineland, New Jersey.
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