Nebius shares surge on $27B infrastructure agreement with Meta
Nebius Group N.V. (NBIS) announced on Monday that it has signed a long-term AI infrastructure supply agreement with Meta Platforms that could be worth up to $27 billion.
Under the five-year agreement, the Nvidia-backed company will provide Meta with $12 billion of dedicated capacity across multiple locations. This will include one of the first large-scale deployments of the Nvidia Vera Rubin platform.
Nebius will deliver the capacity to Meta beginning in 2027.
NBIS shares surged nearly 15% on Monday following news of the deal.
This is the second contract that the Amsterdam-based Nebius has signed with Meta. The company said in December that it had it had signed an agreement with the tech giant valued at about $3 billion over the next five years to deliver AI infrastructure.
Nebius said at the time that it would deploy the needed capacity over the next three months.
With this latest agreement, Meta has committed to purchase additional available compute capacity "across certain upcoming Nebius clusters" that will reach up to a total of $15 billion over a five-year period.
Nebius said that it plans to sell this capacity to third-party customers of its AI cloud business, and the remaining capacity will be bought by Meta.
“We are pleased to expand our significant partnership with Meta as part of securing more large, long-term capacity contracts to accelerate the build-out and growth of our core AI cloud business,” Nebius founder and CEO Arkady Volozh said in a statement. “We will continue to deliver.”
Nebius also strengthens partnership with Nvidia
Nebius said last week that it was forming a strategic partnership with Nvidia to deploy the next generation of hyper scale cloud for the AI market, which will include Nvidia investing an additional $2 billion in Nebius.
The two companies will collaborate on AI factory design and support, AI infrastructure deployment, fleet management, and will also create inference and agentic AI stack for developers and enterprises.
The partnership will enable Nebius to deploy 5 GW of Nvidia systems by the end of 2030.
“AI is at another inflection point — agentic AI, driving incredible compute demand and accelerating infrastructure buildout, ” Nvidia founder and CEO Jensen Huang said in a statement. “Nebius is building an AI cloud designed for the agentic era, fully integrated from silicon to software and powered by NVIDIA’s next-generation accelerated compute. Together, we are scaling the cloud to meet the surging global demand for intelligence.”
BWS Financial analyst Hamed Khorsand reiterated a Buy rating on NBIS shares on Monday, calling its latest agreement "one of the largest contracts awarded by Meta Platforms."
"This dwarfs the initial contract between NBIS and META that now looks like it was a tester contract valued at $3 billion," Khorsand said.
He added that with the deal, "NBIS now seems poised to execute on its growth initiatives to reach its annualized recurring revenue (ARR) target of $7 billion to $9 billion by the end of 2026."
Nebius was spun off from Yandex, considered the “Google of Russia,” after Volozh and other members of the leadership team left the company in opposition to Russia’s war with Ukraine.
In an interview at Nvidia’s GTC Conference last March, Roman Chernin, chief business officer for Nebius, said the company’s role in the AI ecosystem is to build “the unsexiest part of the sexiest industry.”
“Our customers are doing a great job to research and develop the new products, and everyone needs the fuel for that,” he said. “And actually what we provide is the fuel.”