"In the active expansion phase": Bloomberg named the target of the Microsoft and Nebius deal
Microsoft needs the deal with Arkady Volozh's startup to free up its own commercial capacities
Microsoft's contract with cloud computing provider Nebius Group, founded by Kazakh-born Arkady Volozh, founder of Yandex, is designed to provide the tech giant with computing resources for internal projects, Bloomberg sources report. Microsoft will move to the data centers leased from Nebius the tasks of teams developing large language models (AI), as well as a user AI assistant, the agency's interlocutors said.
According to them, thus, as part of the agreement with Nebius, Microsoft will have access to more than 100,000 of the latest GB300 chips from Nvidia. The maximum value of the deal is estimated to be up to $19.4 billion, and its announcement on September 8 was the catalyst for a rally in Nebius shares. However, the details of the agreement were not disclosed at the time, Bloomberg notes.
Microsoft plans to use the freed up in-house capacity to provide high-margin AI services to its customers. That is, Microsoft is trying to cover the shortage of data center capacity.
Microsoft is actively contracting with so-called neoblacks, a new category of small cloud infrastructure providers that specialize in renting servers for AI workloads. According to Bloomberg, Microsoft has already committed more than $33 billion to companies like Nebius, CoreWeave, Nscale and Lambda. These agreements reflect Microsoft's growing willingness to utilize relatively new market players as key cloud infrastructure providers, the agency notes.
"We are in a phase of active expansion in the AI market," Bloomberg quoted Scott Guthrie, head of Microsoft's cloud division, as saying. - We've made the decision that we don't want to limit ourselves in the resources available."
What was known about the deal
The companies previously announced that Nebius will provide Microsoft with GPU-based infrastructure capacity as part of a five-year, $17.4 billion deal. Under the terms of the contract, Microsoft has the right to purchase additional capacity, which could bring the total value of the deal to $19.4 billion.
Since the announcement of the deal with Microsoft, Nebius shares have risen by 80%. In trading on October 2, they were adding 8%. Microsoft's quotations were down 0.5%.
This article was AI-translated and verified by a human editor
