Microsoft Strikes $17B Deal With Nebius to Power AI Ambitions

Microsoft (MSFT, Financials) has signed a deal with Nebius (NBIS, Financials) to provide computing power for internal AI development, Bloomberg reported. The agreement gives Microsoft access to more than 100,000 Nvidia (NVDA, Financials) GB300 chips.

The deal, valued at $17.4 billion over five years and expandable to $19.4 billion, is part of Microsoft's effort to manage a shortage of data center capacity. By shifting some workloads to neocloud providers such as Nebius, the company is freeing up its own infrastructure to deliver cloud services and run OpenAI models.

Microsoft has signed more than $33 billion in commitments to neocloud firms, including CoreWeave, Nscale, and Lambda. Its foundation AI models under consumer AI chief Mustafa Suleyman were trained at a CoreWeave facility in Oregon.

Scott Guthrie, who leads Microsoft's cloud division, said the surge in demand for generative AI has strained computing infrastructure. He noted that the company is in land-grab mode as it races to scale capacity.

The partnerships contrast with Amazon (AMZN, Financials) and Alphabet, which have been slower to embrace neocloud providers. Google is renting limited capacity from CoreWeave, while Amazon has not announced similar collaborations.

Microsoft continues to adjust its infrastructure roadmap, pausing or shifting projects as it balances regulatory requirements and regional capacity needs.