Meta(META.US) Splurges $27 Billion to Seize Computing Power! Joins Forces with "Nvidia Ally" Nebius(NBIS.US) to Amp Up AI Race

Bloomberg News has learned that Meta Platforms (META.US) will pay up to $27 billion over the next five years to cloud service provider Nebius Group (NBIS.US) to access its cutting-edge AI infrastructure. The company is making significant investments in order to compete with top AI models in the industry.

The Dutch company stated Monday in a release that Nebius, a “new type of cloud service provider” operating data centers and forming a strategic partnership with Nvidia, will begin providing Meta with $12 billion worth of dedicated computing power starting early 2027. Meta also committed to purchasing up to an additional $15 billion of capacity, which the cloud provider is building for third-party clients.

This expenditure is one of the largest single contracts Meta has signed, highlighting the parent company of Instagram and Facebook’s push to acquire more computing power to support its AI product development. Last year, the company signed a $3 billion standalone agreement with Nebius.

Nebius shares jumped 15% pre-market. The stock closed at $112.95 in New York last Friday, nearly tripling over the past 12 months. Meta rose 2.8% pre-market, after closing at $613.71.

It is expected that Meta and several of its largest tech peers will invest approximately $650 billion in data centers and other infrastructure by 2026, with explosive growth anticipated in AI services in the coming years. Meta has prioritized AI as a core company focus, investing heavily to compete with rivals like OpenAI and Google. Since the beginning of this year, the company has also signed AI infrastructure cooperation agreements worth billions of dollars with Nvidia (NVDA.US) and AMD (AMD.US). Meta is also developing its own chips internally.

CEO Mark Zuckerberg previously stated that by 2028, Meta will invest $600 billion in infrastructure projects in the U.S. To fund this, Meta relies on profits generated from its advertising business but also secures external financing for infrastructure projects. The company is developing its own high-end models and has created several AI products, including chatbots, that can be used across its various applications.

A Meta spokesperson confirmed the deal with Nebius and said that its diversified AI partnership and technology stack strategy is part of “building more resilient and flexible infrastructure.”

Headquartered in Amsterdam, Nebius was spun off from Russian internet giant Yandex in 2024. It is one of the few new entrants profiting from the AI boom by building data centers dedicated to training models and running services like ChatGPT.

Nvidia has been leveraging its vast resources to fund this new type of cloud provider, competing with larger cloud computing giants like Google and Amazon. Last week, Nvidia announced a $2 billion investment in Nebius, causing the Dutch company’s stock to rise 16%.

Most of Nvidia’s funding has gone toward purchasing its chips, which has drawn criticism for fueling a cycle of investment that some say inflates a bubble. In January this year, Nvidia announced a $2 billion investment in CoreWeave (CRWV.US), a competitor of Nebius, to deploy its products. Nvidia also invested $30 billion in OpenAI this year and participated in a $2 billion funding round for the UK-based new cloud service provider Nscale.