"Congratulations, you played yourself."

That’s pretty much what the entire AI industry just told every bear who’s been screaming from the rooftops about valuations, bubbles, and how this whole thing is going to implode any day now. Because based on the ocean of cash Nebius is currently swimming in (thanks to a little friend called Microsoft), it looks like valuations are about as useful as technical analysis in this market. In other words, good luck drawing head-and-shoulders patterns while Satya Nadella is out here wiring billions.

Nebius Group, which spun out of Yandex last year after Russia’s invasion forced the company to carve up its assets, is having quite the Cinderella story. The stock’s up 54% after Microsoft signed on the dotted line to lease Nebius’s computing power (we’re talking GPUs on GPUs) for the next five years. And the price tag, if I might add… is quite the haul. This one clocks in at $19.4 billion, making it one of the largest AI infrastructure contracts to date. Nearly twenty billion bucks for Nebius to keep Microsoft’s AI ambitions fully loaded and running hot.

In addition to instantly becoming the hottest AI stock on the market this morning… the news also gave a shot in the arm to CoreWeave, another big player in AI infrastructure, because if your neighbor just locked down a $20 billion deal with Microsoft, odds are you’re getting a seat at the barbecue too. The agreement turned Nebius into one of the clearest examples yet of how relentless the demand for AI compute has become. So I guess we can forget all the bubble chatter, at least for this week… the money’s already in the bank.

(Source: Reuters)

And this isn’t happening in a vacuum. Nvidia just reported earnings so thicc Wall Street practically lost its pants, projecting AI infrastructure spending will hit somewhere between $3 trillion and $4 trillion by 2030. Microsoft, meanwhile, already pledged to jack up annual AI spend to $120 billion… nearly 4x what it shelled out in 2023.

I could go on and on, but here’s the point: if every single Big Tech giant is leaning in and spending like there’s no tomorrow instead of cutting back, then maybe this “AI bubble” isn’t a bubble at all. Maybe it’s just the new normal… oxygen for the entire industry.

For Nebius, this is definitely a fat check to hang on the fridge… but it’s also the kind of deal that changes the company’s DNA. They can now pour money into massive U.S. data centers, snap up GPUs at scale, and suddenly play in the same sandbox as CoreWeave and the other AI infrastructure big dogs. What was once a spinoff carved out of Yandex (the company once dubbed “Russia’s Google”) is suddenly in the running to be one of Microsoft’s go-to compute suppliers. 

Its co-founder, Arkady Volozh framed the deal as good economics, but the real takeaway is that Nebius now has guaranteed demand, steady cash flows, and the credibility to raise even more capital. As we’ve all seen firsthand, in the AI arms race, having loads upon loads of chips will get you in the door, but the real win is when a giant like Microsoft drops billions your way. Nebius just did exactly that.

Sure, maybe valuations look insane on paper. OpenAI’s rumored $500 billion valuation… I’ll admit that’s absurd. Anthropic at $183 billion after raising another $13 billion last week? It’s almost unbelievable. But until the industry kingpins slow down on spending… it’s “AI to the moon.”

At the time of publishing this article, Stocks.News holds positions in Microsoft and Google as mentioned in the article.