Meta Signs $27 Billion AI Infrastructure Agreement with Nebius, Stock Price Surges

Investing.com - Nebius Group’s stock surged significantly on Monday after the company announced that Meta Platforms Inc. agreed to invest up to $27 billion over the next five years to acquire AI infrastructure. The social media giant is expanding its computing capacity to support its AI ambitions.

As of 06:22 AM Eastern Time, Nebius shares jumped about 15%, while Meta’s stock rose nearly 3%.

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According to the agreement, this Amsterdam-listed cloud service provider will begin providing Meta with dedicated capacity worth $12 billion starting early 2027, Nebius stated in a release. Meta also committed to purchasing up to $15 billion in additional capacity built by Nebius for third-party clients.

This deal marks one of Meta’s largest contracts to date, as the company ramps up investments in infrastructure needed for AI product development. The two companies have already established a partnership; last year, Meta signed another $3 billion agreement with Nebius.

Arkady Volozh, founder and CEO of Nebius, said in a statement, “We are pleased to expand our important partnership with Meta, which is part of our efforts to secure more large-scale long-term capacity contracts to accelerate the development and growth of our core AI cloud business. We will continue to deliver results.”

The agreement comes after Nebius achieved another major milestone last week. Nvidia Corp. announced it would invest $2 billion in the Dutch company as part of a strategic partnership focused on developing AI data centers.

Nebius said this investment will help it deploy over 5 gigawatts of Nvidia systems by the end of 2030, a capacity sufficient to power approximately 3.8 million homes at any given time.

Nebius is one of a new wave of “new cloud” operators building data centers dedicated to training AI models and running services like ChatGPT. As these companies compete with major cloud providers like Google (a subsidiary of Alphabet) and Amazon, Nvidia is increasingly supporting them, while these large providers are also developing their own AI accelerators.

Volozh stated that Nebius primarily relies on Nvidia chips for its systems and described this new investment as a relatively small part of the company’s overall spending plans. Nebius expects capital expenditures this year to be between $16 billion and $20 billion.

The deal also coincides with Meta accelerating its spending on AI infrastructure. Major tech companies, including Meta and its peers, are expected to invest around $650 billion by 2026 in building data centers and purchasing AI service equipment.

Meta has made AI a top strategic priority, signing infrastructure deals worth billions of dollars with Nvidia and AMD since the beginning of this year, while also developing its own chips internally.

CEO Mark Zuckerberg said last year that Meta plans to invest $600 billion in U.S. infrastructure projects by 2028, funded mainly by profits from its advertising business and external financing.

Over the weekend, Reuters reported that Meta is planning large-scale layoffs that could affect 20% or more of its staff, as the company seeks to offset expensive AI infrastructure costs and prepare to improve employee efficiency through AI assistance. The timeline and scale of layoffs have not yet been finalized.

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