In recent years, Nvidia (NVDA +0.40%) It has become synonymous with artificial intelligence (AI). The company’s graphics processing units (GPUs) provide the computing power that powers AI and are the gold standard for these applications. Nvidia is also a significant investor in the AI space, owning stakes in various chipmakers, software developers, and infrastructure providers.
The company made headlines this week with an update on its growing list of investments and strategic alliances.
Image source: Motley Fool.
In a press release issued Wednesday, Nvidia announced a strategic partnership with neocloud provider nevius group (NBIS +14.83%) “Developing and deploying the next generation hyperscale cloud for the AI market.” As part of the deal, Nvidia will invest $2 billion in Nebius, which the company says reflects Nvidia’s confidence in Nebius’ business and its unique deep engineering expertise across the entire AI technology stack. ”
The companies plan to collaborate on developing and building data centers to support Nebius’ cloud growth and establish “multiple gigawatt-scale AI factories in the United States.” Nvidia’s investment will enable Nebius to deploy more than 5 gigawatts of capacity by the end of 2030.
“Nebius is building an AI cloud designed for the agent era, fully integrated from silicon to software and powered by Nvidia’s next-generation accelerated computing,” said Nvidia CEO Jensen Huang. “Together, we are expanding the cloud to meet the rapidly growing demand for intelligence around the world.”
Today’s changes
(0.40%) $0.74
current price
$185.50
Key data points
Market capitalization
$4.5 trillion
daily range
$184.45 -$187.62
52 week range
$86.62 – $212.19
volume
4.2M
average volume
177M
gross profit
71.07%
dividend yield
0.02%
Nebius is one of an emerging group of neocloud operators stockpiling cutting-edge chips and offering AI-centric cloud services, commonly referred to as GPU-as-a-Service (GPUaaS). The company was valued at just over $24 billion as of yesterday’s market close, but news of the partnership with Nvidia sent its stock price up 16% (as of this writing), pushing its market cap to $28 billion.
Earlier this month, Nebius received groundbreaking approval for its largest AI factory in the company’s history, with construction expected to begin soon in Independence, Missouri.
Nevius and his big rival, core weavehas experienced explosive revenue growth, driven by strong demand for AI. In late January, Nvidia signed a similar deal with CoreWeave, investing $2 billion to help the company build 5 gigawatts of AI capacity by 2030.
Nvidia has invested heavily in many companies that buy its AI chips, and there is talk of circular trading fueling an AI bubble. The deal does nothing to silence critics.
Today’s changes
(14.83%) $14.30
current price
$110.73
Key data points
Market capitalization
24 billion dollars
daily range
$104.49 – $114.08
52 week range
$18.31 – $141.10
volume
32M
average volume
13M
gross profit
-765.63%
Nebius continues to grow like wildfire due to the surge in demand for AI-centric neo-cloud services. Sales in 2025 were $530 million, an increase of 479% from the previous year, but operating loss was $596 million, a 49% worsening.
Neocloud operators have emerged to fill the gap between the demand for AI services and the lack of data centers needed to provide them. Largest cloud operators — including Amazon web services, alphabetGoogle Cloud, and microsoft Azure — Everyone acknowledges that there is more demand for AI and cloud services than existing data centers can provide, and that capacity is constrained.
As major cloud providers struggle to keep up with the surge in demand for AI, the opportunity is ripe for neo-cloud providers to fill the void. That said, Nevius stock currently trades at 43 times sales, a very high valuation for a company with no profits. Nebius is therefore a high-risk, high-return opportunity that should only be owned as a small part of a balanced portfolio.
