Artificial intelligence infrastructure company Nebius Group surged in U.S. premarket trading on Tuesday after announcing a multi-billion-dollar partnership with Microsoft.
At 10:39 a.m. London time (05:39 a.m. E.T.), Nebius shares were up 51 percent. The Amsterdam-based firm confirmed it had signed a multi-year deal worth 19.4 billion dollars with Microsoft to provide cloud computing power for AI workloads.
Nebius, which spun out of Russian internet company Yandex in 2023, specialises in providing graphics processing units (GPUs) for training AI models. Under the agreement, Nebius will generate 17.4 billion dollars in revenue through 2031, with Microsoft holding the option to purchase additional computing capacity if required.
The stock rally continued from Monday, when Nebius shares jumped 60 percent in extended trading. The announcement also lifted shares of rival AI infrastructure company CoreWeave, which rose 6.6 percent in premarket trading.
The deal underscores the strong and ongoing demand for advanced computing equipment essential to train and operate next-generation AI systems.
Last month, Nvidia, the leading player in AI infrastructure, reported earnings and revenue that exceeded market expectations for the three months ending in June. The company also projected sales growth above 50 percent in the current quarter, driven by sustained demand for its AI chips.
Nvidia’s Chief Financial Officer Colette Kress said during its earnings call that AI infrastructure spending could reach between 3 trillion and 4 trillion dollars by the end of this decade.
However, some concerns remain in the market. Last month, OpenAI CEO Sam Altman, along with several experts and analysts, warned that the AI sector may be heading toward a bubble.
Private AI company valuations have climbed rapidly over the past three years. OpenAI is reportedly valued at around 500 billion dollars, while Anthropic recently secured a 13 billion dollar funding round at a 183 billion dollar valuation.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter |The Mainstream formerly known as CIO News Whatsapp Channel | The Mainstream formerly known as CIO News Instagram
About us:
The Mainstream formerly known as CIO News is a premier platform dedicated to delivering latest news, updates, and insights from the tech industry. With its strong foundation of intellectual property and thought leadership, the platform is well-positioned to stay ahead of the curve and lead conversations about how technology shapes our world. From its early days as CIO News to its rebranding as The Mainstream on November 28, 2024, it has been expanding its global reach, targeting key markets in the Middle East & Africa, ASEAN, the USA, and the UK. The Mainstream is a vision to put technology at the center of every conversation, inspiring professionals and organizations to embrace the future of tech.
