Nebius, a fully owned subsidiary of Nebius Group, has formalised a commercial agreement with Microsoft, granting the tech giant access to dedicated GPU infrastructure capacity at its newly established data centre in Vineland, New Jersey.
This agreement, which spans five years, will see the provision of GPU services in multiple phases throughout 2025 and 2026.
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The total value of the contract is approximately $17.4bn extending through to 2031, contingent upon the successful deployment and availability of the GPU Services.
Additionally, Microsoft has the option to procure further services or capacity under the terms of the agreement, potentially raising the total contract value to around $19.4bn.
Nebius founder and CEO Arkady Volozh said: “Nebius’s core AI cloud business, serving customers from AI startups to enterprises, is performing exceptionally well.
“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.”
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By GlobalDataIf Nebius fails to meet the agreed GPU Service delivery timelines after a grace period and cannot provide alternative capacity, Microsoft reserves the right to terminate that specific GPU Service.
Furthermore, either party may terminate the agreement for cause if the other party commits a material breach that is not rectified within 60 days, or if one party ceases operations, dissolves, or faces bankruptcy proceedings that are not resolved within 30 days.
However, this termination right does not apply if a party enters Chapter 11 Bankruptcy and is engaged in reorganisation or transfer activities related to that bankruptcy, including the transfer of the agreement to a solvent entity.
The agreement includes standard provisions typical for such contracts, encompassing service level commitments, penalties for late delivery, representations and warranties, indemnities, and limitations on liability.
The obligations outlined in the agreement will take effect once Nebius confirms to Microsoft that it has secured any necessary additional financing related to the capital expenditures stipulated in the agreement.
