The shares of Nebius Group, the AI cloud company founded by Yandex co-founder Arkady Volozh, jumped 50% in after-hours trading on September 8 after the announcement of a major agreement with Microsoft. The surge pushed the company’s market capitalisation above $20bn.

The five-year deal, valued at $17.4bn, will see Nebius provide computing power for Microsoft’s artificial intelligence projects. The value of the contract could rise to $19.4bn if Microsoft expands its usage. Under the agreement, Nebius will finance the construction of a new data cluster in Vineland, New Jersey, and reserve AI chips using both proceeds from the deal and borrowed funds.

“Nebius’ core AI cloud business, aimed at customers from startups to large enterprises, is developing exceptionally well,” Volozh said, as quoted by the company. “The economics of the deal are favourable in itself, but in addition, it will allow us to accelerate the growth of the cloud AI business in 2026 and beyond.”

The agreement positions Nebius as a major player in the emerging “neocloud” sector—contracted computing power, also referred to as GPU-as-a-Service—placing it alongside competitors such as CoreWeave. Microsoft’s contract with CoreWeave is smaller, at $10bn, although CoreWeave also holds a $12bn agreement with OpenAI. The Nebius deal is seen as easing concerns around the company’s operating losses, with revenue having doubled quarter-on-quarter this year alone.

The contract also reflects Volozh’s strategic focus on addressing the infrastructure bottlenecks of the AI sector. “We will try to be the most important infrastructure for these startups. We ourselves came from big tech, but now we are ‘in the cold’—just like them. So we understand what they are dealing with,” Volozh told The Bell in an earlier interview.

The development marks a clear separation between Nebius and its Russian origins. While Nebius began as part of the Dutch arm of Yandex, it has since grown into a standalone entity, now valued significantly higher than Yandex itself, which remains restricted to the Russian market.

Yandex, which now distributes dividends rather than reinvesting in development, is controlled by a consortium of Russian investors including entities linked to oligarchs close to the Kremlin, including Vladimir Potanin, Vagit Alekperov, and Yuri Kovalchuk, a long-time associate of President Vladimir Putin.

A year ago, analysts estimated the total value of the Nebius Group at between $4bn and $6bn, including $2.5bn from its separation from Yandex. The company’s current valuation more than triples those estimates.

The rise marks a turning point for Volozh, who spent two years navigating sanctions and separating from Yandex. “Now he is back at the helm of a large global business, which he built himself again,” The Bell noted.

Volozh is one of only two top Russian businessmen that have publicly condemned Russia’s invasion of Ukraine, which he called a “barbaric war.” The other businessman was Oleg Tinkov, who has set up Plata, a successful fintech company in Mexico.