Microsoft has signed a deal with neocloud company Nebius Group NV worth up to $19.4 billion, reports Bloomberg. As per the report, the deal is aimed to secure computing power for its internal AI projects and consumer AI assistant. The report quotes people familiar with the matter who said that Microsoft will gain access to more than 100,000 of Nvidia ’s latest GB300 chips under the agreement.
The deal comes as Microsoft looks to tackle a global shortage of data center capacity needed for AI training. By using Nebius and other neocloud providers, Microsoft can free up its own servers to deliver more AI services to customers.
“The strategy is aimed at coping with a shortage of AI data center capacity and letting Microsoft free up its own server farms to provide lucrative AI services to customers,” the Bloomberg report said.
This is not Microsoft’s only partnership with smaller infrastructure firms. As per the report, the software giant has made over $33 billion in commitments to neocloud providers such as CoreWeave, Nscale, Lambda, and Nebius. These companies lease AI-focused server power, allowing Microsoft to quickly expand capacity without waiting to build new data centers.
Rising AI demand
The report quotes Scott Guthrie, who leads Microsoft’s cloud division, who said “We are in very much land-grab mode in the AI space”, adding “We’ve made the decision that we don’t want to be constrained in terms of capacity.”
Following the announcement, Nebius shares rose 5.5% in New York trading, while Microsoft’s stock remained mostly unchanged.
What experts say
Analysts say these neocloud deals also give Microsoft more flexibility by treating costs as operational expenses, rather than capital investments. At the same time, Microsoft is continuing to expand its own data centers, including a large-scale project in Wisconsin.
The deal comes as Microsoft looks to tackle a global shortage of data center capacity needed for AI training. By using Nebius and other neocloud providers, Microsoft can free up its own servers to deliver more AI services to customers.
“The strategy is aimed at coping with a shortage of AI data center capacity and letting Microsoft free up its own server farms to provide lucrative AI services to customers,” the Bloomberg report said.
This is not Microsoft’s only partnership with smaller infrastructure firms. As per the report, the software giant has made over $33 billion in commitments to neocloud providers such as CoreWeave, Nscale, Lambda, and Nebius. These companies lease AI-focused server power, allowing Microsoft to quickly expand capacity without waiting to build new data centers.
Rising AI demand
The report quotes Scott Guthrie, who leads Microsoft’s cloud division, who said “We are in very much land-grab mode in the AI space”, adding “We’ve made the decision that we don’t want to be constrained in terms of capacity.”
Following the announcement, Nebius shares rose 5.5% in New York trading, while Microsoft’s stock remained mostly unchanged.
What experts say
Analysts say these neocloud deals also give Microsoft more flexibility by treating costs as operational expenses, rather than capital investments. At the same time, Microsoft is continuing to expand its own data centers, including a large-scale project in Wisconsin.
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