Tech Explained: Here’s a simplified explanation of the latest technology update around Tech Explained: Meta Platforms Just Delivered Incredible News to This AI Data Center Company in Simple Termsand what it means for users..
Known as a major hyperscaler, Meta Platforms (NASDAQ: META) is one of several large tech companies that are essentially funding the infrastructure needed to power the deployment of artificial intelligence (AI). One way the hyperscalers are doing this is by building data centers or purchasing computing capacity in centers designed to run AI applications.
Recently, Meta just provided incredible news to one AI data center stock.
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Recently, an AI data center company called Nebius Group (NASDAQ: NBIS) announced that it had just inked a five-year contract with Meta to provide capacity across several of its data centers for the “Magnificent Seven” tech giant.
Per the agreement, Nebius will provide $12 billion in capacity at its data centers, which will feature Nvidia‘s next-generation graphics processing units (GPUs) and platform, called Vera Rubin. Meta will also purchase added computing capacity worth up to $15 billion in other Nebius data centers that will open over the next five years.
Nebius plans to sell this capacity to third-party cloud customers, but Meta will buy the remaining capacity. The contract between Nebius and Meta has a total value of up to $27 billion. The former builds data centers equipped with Nvidia’s latest platforms and GPUs, then rents them to companies looking to deploy AI. Many of these customers have been hyperscalers.
Nebius and Meta had already announced a first agreement at the end of 2025 to provide $3 billion of capacity over a five-year period. So this second deal, which is occurring only about four months after the first, is a good sign for the relationship between the two.
The new Meta deal has the potential to be bigger than an earlier agreement Nebius signed with Microsoft, which has the potential to be worth $19.4 billion over five years.
Therefore, the Meta deal should significantly increase Nebius’ medium-term revenue guidance. In 2025, Nvidia exited the year with an annual recurring revenue (ARR) run rate of $1.2 billion. Actual revenue in 2025 was about $530 million. In 2026, Nebius’ management has guided for actual revenue between $3 billion and $3.4 billion, while achieving an ARR run rate between $7 billion and $9 billion.
The deal with Meta is not slated to kick in until 2027, but even with the initial five-year $12 billion deal, that would add $2.4 billion to annual revenue, assuming it’s spread out evenly, which should allow it to conservatively hit an ARR rate surpassing $10 billion in 2027.