Microsoft inks AI infra deal with Yandex cofounder's biz for nearly $20B (www.theregister.com)

Microsoft has inked a landmark agreement with Nebius Group, a Netherlands-based AI infrastructure provider spun off from Yandex’s European operations, for nearly $20 billion over five years. This deal grants Microsoft access to Nebius’s GPU capacity from a new data center in Vineland, New Jersey, with phased deployments set for 2025 and 2026, extending through 2031. The contract underscores Microsoft’s ongoing heavy investment in AI compute infrastructure amid global demand growth, despite mixed early business returns and industry skepticism about the immediate productivity gains from AI tools. Technically, Nebius plans to finance the necessary capital expenditures via cash flow from the deal and debt instruments secured against the contract. The arrangement reflects a broader trend of hyperscalers outsourcing GPU capacity to specialized providers to scale AI workloads cost-effectively while managing capital risks. Nebius’s CEO Arkady Volozh emphasized the strategic importance of this deal for growing their AI cloud services and hinted at future agreements with other top AI labs, signaling intensifying competition in the AI infrastructure space. This partnership highlights the critical role of robust and flexible GPU infrastructure in powering next-gen AI development and deployment at massive scale.