Microsoft has signed a five year deal to use GPU services from neocloud Nebius Group.

The contract is worth $17.4 billion over the half decade, although further services and capacity could bring the deal up to $19.4bn.

Nebius will initially provide Microsoft access to dedicated GPU infrastructure capacity at its new data center in Vineland, New Jersey, from later this year. The facility was originally announced in March, with a 300MW initial capacity and potential to expand by another 400MW.

The company is also deploying clusters at a data center owned by Patmos in Kansas City, Missouri; at a Verne facility in Iceland; at Ark Data Centres in the UK; and at a new facility in Israel.

Last year, Nebius said that it would triple the capacity of its existing data center in Finland to 75MW. We visited the data center at the time.

The company was formed in 2023 out of the non-Russian assets of Yandex, after the business was split following the invasion of Ukraine.

“Nebius’s core AI cloud business, serving customers from AI startups to enterprises, is performing exceptionally well," Arkady Volozh, founder and CEO of Nebius, said.

"We have also said that, in addition to our core business, we expect to secure significant long-term committed contracts with leading AI labs and big tech companies. I’m happy to announce the first of these contracts, and I believe there are more to come. The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond.”

To support the new deal, Nebius plans to raise debt secured against the contract in the near term. Microsoft also uses rival neocloud CoreWeave for GPU capacity.

Shares in Nebius jumped some 60 percent on news of the deal.