Shares in Amsterdam-based Nebius surged more than 50% in US premarket trading after the company announced a$19.4 billion deal with Microsoft. The agreement will provide cloud computing power for AI workloads and is set to run until 2031.

Under the pact's terms, Nebius will generate$17.4 billion in revenue over the next six years, with Microsoft also retaining the option to purchase additional computing capacity.

Investors responded strongly, with Nebius shares climbing 60% in extended trading on Monday and continuing their rise on Tuesday. Rival AI infrastructure company CoreWeave also benefited, gaining more than 6% premarket.

Nebius, spun out from Russian internet firm Yandex in 2023, specialises in supplying GPUs for training AI models. The deal underscores the high demand for computing power as companies race to develop increasingly advanced AI systems.

Industry leader Nvidia recently reported soaring earnings and forecast that AI infrastructure spending could reach$4 trillion by 2030.

The boom in AI infrastructure comes amid mounting questions over whether valuations are sustainable. OpenAI has reportedly reached a$500 billion valuation, while rival Anthropic recently raised$13 billion at a$183 billion valuation.

Some analysts, including OpenAI chief executive Sam Altman, have warned that the AI sector may already show signs of a bubble.