Shares of Nebius Group soared more than 60% in extended trading on Monday after the provider of Nvidia graphics chips for training artificial intelligence models said it's signed an agreement with Microsoft worth up to $19.4 billion over five years.
Nebius, which is based in Amsterdam, will deliver computing resources to Microsoft using a data center in New Jersey, according to a statement. Nebius changed its name from Yandex NV last year after Russian investors bought Yandex's Russian-language search engine and other assets.
Microsoft is increasingly looking to third parties to address a demand shortage for cloud infrastructure that can handle AI workloads. OpenAI, one of Microsoft's top Azure cloud customers, has been searching for additional capacity as users ramp up their adoption of ChatGPT. OpenAI's latest computing supplier is Google.
Microsoft has also turned to CoreWeave for additional AI computing power, and OpenAI has signed a direct agreement with CoreWeave that's worth billions of dollars.
CoreWeave shares were up about 5% after hours, while Microsoft shares were little changed.
Nebius said it's looking at financing options to grow faster than it had planned, according to the statement. In a filing with the SEC, the company said that the GPU services will be deployed in multiple tranches this year and next, and that the total contract value through 2031 is $17.4 billion, with Microsoft reserving the option to buy an additional $2 billion worth of services.
Founded in 1989, Nebius said in November that it has opened office space in San Francisco, Dallas and New York as it expands in the U.S. "Growing our presence in the US means we can be closer to our customers and support innovative American AI businesses on their journey into the future," the company wrote in a blog post at the time.
Prior to the post-market pop, Nebius had already more than doubled in value this year, closing on Monday with a market cap of just over $15 billion.
— CNBC's Ari Levy contributed to this report.
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