Dutch Tech Darling Nebius Soars 40% After Microsoft's AI Mega-Deal

9 Sept 2025 14:30

Key Points

• Nebius Group has secured a staggering £19.4 billion data centre lease with Microsoft
• The Dutch firm will construct a massive AI infrastructure hub in New Jersey
• Microsoft’s cash injection will finance the ambitious building project
• Critics question whether Nebius can deliver on such an enormous commitment

Netherlands-based Nebius Group stock rocketed 40% by 9:45 a.m. ET Tuesday after announcing what might be the deal of the decade - a “multi-billion dollar agreement with Microsoft for AI infrastructure.”

How multi-billion? Reuters reports the arrangement will pump £17.4 billion into Nebius over five years, potentially reaching £19.4 billion. Not bad for a company most investors couldn’t name before today.

Image source: Getty Images

Nebius Who?

Never heard of Nebius? Join the club. But this obscure Dutch tech outfit boasts some eye-watering numbers. Valued at £15.3 billion before today’s surge, S&P Global data shows Nebius generated just £249 million in revenue last year - yet somehow transformed £243.5 million into pure profit.

That’s a jaw-dropping 97.7% profit margin. One must wonder what sort of financial wizardry they’re employing, and whether such margins can possibly be sustained with this massive new revenue stream.

The Grand Plan

According to regulatory filings, Nebius will provide “dedicated GPU infrastructure capacity” to Microsoft in stages at its yet-to-be-built Vineland, New Jersey data centre. The arrangement kicks off this year, expands in 2026, and runs through at least 2031.

Nebius faces enormous capital expenditures during construction while simultaneously raking in Microsoft’s millions. They’ll use incoming revenue to finance building costs, alongside taking on substantial debt.

It’s a massive financial gamble. The company is essentially betting its entire future on this single client relationship. Should Microsoft’s AI ambitions falter or technical hurdles arise, Nebius could find itself with an expensive white elephant and crippling debt.

I’ve watched too many tech companies overextend themselves with grandiose projects only to collapse under their own ambition. Time will tell if Nebius has the operational expertise to deliver on such an enormous commitment, or if they’ve just signed their own death warrant wrapped in Microsoft’s billions.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

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