Nebius Secures $50 Billion AI Cloud Backlog via Microsoft and Meta Partnerships

Nebius Group (NBIS) has positioned itself as a critical intermediary in the AI stack, securing nearly $50 billion in contracted backlogs from industry titans Microsoft and Meta Platforms. Emerging from the restructuring of Yandex, Nebius operates a vertically integrated model, designing proprietary server racks and networking software to offer high-performance GPU compute with lower latency than general-purpose cloud providers. The company's growth is anchored by a $19.4 billion five-year deal with Microsoft and a combined $30 billion in contracts with Meta. The Meta agreement includes $12 billion in dedicated capacity and up to $15 billion in additional capacity, marking one of the first large-scale deployments of Nvidia's Vera Rubin platform. Further validating the strategy, Nvidia recently made a $2 billion direct equity investment in Nebius as a strategic partner for next-generation hyperscale infrastructure. Financial targets are aggressive. Nebius aims to scale its data center capacity from 170 megawatts at the end of 2025 to between 800 megawatts and 1 gigawatt by the end of 2026. While 2025 revenue stood at $530 million, management has guided for 2026 revenue between $3 billion and $3.4 billion, with an adjusted EBITDA margin near 40%. However, this expansion carries substantial risk. The company plans to spend between $16 billion and $20 billion in capital expenditures this year. This spending pace significantly exceeds current revenue, meaning the company's valuation is heavily dependent on its ability to successfully convert its massive backlog into realized cash flow.