Nebius share jumps after the multi-billion-dollar Microsoft deal triggers a 6.6% boost for rival, CoreWeave.
There have been incessant discussions around what AI is capable of. The thirst and will to build more intelligent, faster, and agile models have observably become insatiable.
But little do they realize the well of computing power that each machine learning application and foundational model actually demands.
Across several countries, there are hundreds of data centers with servers that power your AI systems. And the hunger to unlock AI’s unimaginable potential has led to an unquenching demand for more data centers, and ultimately more computing power.
This is what underpins Microsoft’s latest alliance with Nebius, an Amsterdam-based tech firm.
Here are the tidbits.
The company, spun from the Russian Internet giant Yandex, develops GPUs to train AI models. Under this multi-year contract, the objective is to provide cloud computing power to support AI workload.
Following this arrangement, Microsoft will also receive additional cloud computing capacity. And a consistent supply of AI infrastructure to keep its momentum in the AI race.
On the other hand, the rising demand for Gen AI models can also encourage Microsoft to boost its need for compute power. This could easily result in $17.4 billion deal turning into $19.4 billion one.
It remains a future possibility, as the speculations assert.
For now, Wall Street’s cheers for Nebius sent its shares soaring almost 55% to $99.2 on Tuesday. And if the gains hold, it could add over $7.7 billion to the existing $15.3 billion market capitalization.
Where’s the market headed?
According to McKinsey & Company, the situation is about to turn even more dire- by 2030, data centers will potentially require $6.7 billion to keep pace with the demand for computing power. The race to clasp on to as much data center capacity as possible is on.
And it doesn’t show signs of slowing down in the near future.
With the AI boom widespread across the world, and superpowers such as China and the US competing in the race, the demand is only projected to surge.
