In a notable development within the rapidly-evolving AI sector, Microsoft has signed a landmark deal worth up to $19.4 billion with Nebius, a Netherlands-based company. This agreement, which will see Nebius providing GPU infrastructure over five years, underscores Microsoft’s commitment to bolstering its AI capabilities. Nebius, formerly known as Yandex N.V., has separated its Russian operations and now focuses on AI-driven sectors.

With its new data center in Vineland, New Jersey, Nebius will supply Microsoft with dedicated capacity. The deal’s basic contract value is set at $17.4 billion until 2031 but could climb if Microsoft opts for additional services. Arkady Volozh, Nebius’s CEO, highlighted the agreement’s potential to accelerate the company’s growth in the AI cloud domain.

Despite lingering skepticism about AI’s immediate business benefits, Microsoft is pressing forward, planning to invest heavily in AI training and deployment infrastructure in 2025. Other companies, like CoreWeave, have also cemented significant partnerships with Microsoft for AI projects. While the substantial reliance on a single customer can be risky, Nebius remains focused on its expansion plans and continued leadership in the AI infrastructure market.