Nebius has emerged as Europe's most compelling AI infrastructure story, securing $20 billion in combined contracts from Meta and Microsoft, underscoring a fundamental shift in how technology giants source computing capacity.
The Amsterdam-based operator announced a $3 billion five-year agreement with Meta in December 2025, adding to a $17 billion Microsoft deal closed just three months prior.
These megadeals have propelled Nebius's stock 248 percent higher this year while pushing its market valuation beyond $25 billion.
The rapid succession of hyperscaler partnerships reveals an uncomfortable truth in the AI industry: capacity scarcity has become the new constraint on innovation.
Nebius founder and CEO Arkady Volozh stated during the company's third-quarter earnings call that the organization sells out all available capacity the moment it comes online.
This dynamic has created an unprecedented opportunity for specialized infrastructure providers willing to invest aggressively in deployment and expansion across multiple geographies.
How Nebius Transformed from Yandex Spinoff into AI Infrastructure Powerhouse
Nebius emerged from the July 2024 breakup of Russian tech giant Yandex with a critical advantage: a fully operational data center in Finland and established partnerships with Nvidia spanning years.
Rather than starting from scratch like many infrastructure startups, Nebius inherited physical assets and technical relationships that positioned it perfectly for the AI boom.
The company has since expanded operations across Europe and the United States, including recent deployments in the United Kingdom featuring Nvidia Blackwell Ultra GPUs.
The company's founding team understood that neocloud providers needed fundamentally different operational models than traditional cloud operators.
While Amazon Web Services, Microsoft Azure, and Google Cloud compete on breadth and developer tooling, Nebius focuses exclusively on delivering maximum performance computing capacity for AI workloads.
This specialization allows the company to optimize every aspect of infrastructure delivery, from power distribution to cooling systems to networking architecture, around the specific requirements of large-scale machine learning training and inference operations.
Did you know?
Nebius is a technology company specializing in AI infrastructure (often called a "neocloud" provider), offering high-performance computing, particularly access to powerful NVIDIA GPUs, for training and deploying large AI models.
What Makes GPU Capacity So Valuable in Today's AI Arms Race
The artificial intelligence industry faces a persistent supply-demand imbalance that shows no signs of moderating in the near term. Companies developing frontier large language models, multimodal systems, and specialized AI applications require massive quantities of graphics processing units to train and deploy their systems.
Nvidia's H100, H200, and Blackwell architectures represent the current cutting edge, with production constrained by semiconductor manufacturing capacity and the complexity of these specialized chips.
This scarcity has transformed GPU capacity into a strategic asset equivalent to oil during the energy crisis of the 1970s.
Technology companies are willing to lock in long-term contracts at premium prices simply to secure predictable access to computing power.
Nebius recognized this dynamic early and positioned its business model around guaranteed capacity delivery rather than competing on price or feature breadth.
The company's contracts with Meta and Microsoft include multi-year commitments that remove deployment uncertainty and provide Nebius with the capital certainty needed to fund aggressive expansion.
Why Meta and Microsoft Are Betting Billions on European Infrastructure
Meta and Microsoft face simultaneous pressures that make European infrastructure partnerships strategically essential. Both companies are racing to develop and deploy advanced AI systems that require more computing power than existing infrastructure can provide.
Building this capacity entirely in-house through data center construction would take years and require navigating regulatory complexities across multiple jurisdictions.
Partnering with a dedicated infrastructure provider offers speed, flexibility, and regulatory compliance benefits that internal development cannot match.
European regulatory frameworks around data privacy, energy consumption, and environmental sustainability differ substantially from American requirements.
Establishing infrastructure in Europe demonstrates a commitment to data residency requirements that matter to major corporations operating across the continent.
Nebius's operations in Finland, multiple European locations, and United Kingdom facilities provide Meta and Microsoft with geographic and regulatory diversity that a purely American infrastructure strategy could not achieve.
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Can Nebius Scale Fast Enough to Meet Explosive Demand
Nebius has announced ambitious capacity targets that will test the company's operational capabilities and supply chain management. The organization plans to secure 2.5 gigawatts of contracted capacity across Europe and the United States by the end of 2026, representing roughly triple current capacity levels.
Third-quarter 2025 revenue reached $146.1 million, up 355 percent year-over-year, but the company missed analyst expectations due to deployment timing constraints that affected infrastructure availability.
To fund this acceleration, Nebius raised $4.2 billion through public share offerings and convertible bond securities following the Microsoft agreement.
The company increased its 2025 capital expenditure guidance from $2 billion to $5 billion, reflecting the magnitude of infrastructure investment required to capture market opportunity.
Arkady Volozh emphasized that Nebius prioritizes profit margins over raw revenue expansion when negotiating with hyperscalers, ensuring that growth investments translate to sustainable profitability rather than unsustainable scaling at negative margins.
What's Next for Europe's Fastest-Growing Neocloud Provider
Nebius targets an annualized revenue run rate between $7 billion and $9 billion by the end of 2026, with more than half already secured through long-term contracts with Meta, Microsoft, and other customers.
This visibility into future revenue provides remarkable certainty compared to traditional software or cloud service providers, which face quarterly demand volatility.
The company's trajectory positions Nebius to capture a disproportionate share of European AI infrastructure investment over the coming years.
The broader implications extend beyond Nebius's individual success. The company's emergence demonstrates that specialized infrastructure providers can compete effectively against hyperscalers when they focus on underserved segments and build superior operational capabilities.
European technology leadership has faced persistent challenges competing with American and Chinese incumbents, but the AI infrastructure segment appears genuinely open to new entrants willing to invest aggressively.
Nebius's $20 billion in megadeals validates the strategic importance of domestic AI infrastructure capacity and suggests that European tech policy supporting computational sovereignty will accelerate investment in providers like Nebius over the coming decade.
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