Nebius shares soared 47% after securing a $17.4 billion GPU supply deal with Microsoft, driving up stock prices for AI mining firms like Cipher Mining and IREN.

Executive Summary

Nebius Group shares jumped 47% in pre-market trading following the announcement of a $17.4 billion agreement with Microsoft to supply GPU infrastructure over five years. The deal, potentially expandable to $19.4 billion, also positively impacted the stock prices of other AI mining companies such as Cipher Mining and IREN.

The Event in Detail

Under the agreement, Nebius will provide dedicated GPU clusters from its new data center in Vineland, NJ, starting later in 2025. Microsoft aims to secure a guaranteed pipeline of computing power amidst high demand for AI hardware. The contract's potential expansion to $19.4 billion allows Microsoft to scale up capacity in response to rising AI demand. Nebius intends to fund the infrastructure through cash flow from the deal and debt backed by the contract, considering other funding sources to fuel growth.

Market Implications

The Nebius-Microsoft deal highlights the increasing demand for GPU infrastructure in the AI sector. The surge in Nebius shares and the rise in Cipher Mining and IREN stock prices reflect bullish market sentiment towards companies involved in AI mining and GPU infrastructure. This agreement signifies a major long-term partnership, positioning Nebius as a key player in global AI infrastructure, challenging established giants. Iren, a Bitcoin miner, has seen its stock rise by 17% over the past week due to its AI strategies. Cipher Mining has also experienced a 10% increase during the same period.

Expert Commentary

Nebius CEO Arkady Volozh stated that this agreement is the first of several long-term deals planned with leading technology firms, demonstrating the company's capability to compete with established industry giants.

Analysts note the deal as one of the largest ever secured by an AI start-up and ranks as one of the most significant in the history of the AI industry. It underscores Microsoft's commitment to leading in AI development and application.

Broader Context

The deal occurs as Microsoft exceeded Wall Street expectations, posting quarterly earnings of $3.65 per share and revenue of $76.44 billion. The Intelligent Cloud unit brought in $29.88 billion, also surpassing forecasts. This agreement also underscores the growing intersection of blockchain and AI, as exemplified by companies like Render (RNDR), which leverages a distributed, tokenized model to meet the increasing demand for GPU power from AI companies. Iren's strategic pivot towards AI cloud services, reflected in its Q3 2025 results with $187.3 million in revenue and $176.9 million in net income, highlights a broader trend of cryptocurrency miners diversifying into AI.

Iren Limited (IREN) successfully resolved a $107.8 million legal dispute with NYDIG, paying $20 million to settle the ongoing litigation. This settlement has removed a significant legal risk, allowing Iren to redirect its focus towards expanding its artificial intelligence (AI) infrastructure. The company has secured a $168 million order of Nvidia GPUs and a $96 million purchase of GB300 systems, positioning it for substantial growth in the AI cloud business.