AI INFRASTRUCTURE

Nebius raising $3B for AI infrastructure following Microsoft deal

AI infrastructure company Nebius announced Yesterday it is raising $3 billion through a public and private offering, as the company undergoes rapid growth on the heels of announcing a long-term contract with Microsoft. 

The company said it will use the funds to finance continued growth, acquire more computing capabilities and equipment, secure strategically placed, high-quality land and broaden the company’s data center footprint.

The announcement comes just days after Nebius’ Monday announcement that it would be delivering AI infrastructure to Microsoft in a multi-billion-dollar, multi-year agreement. The dedicated capacity for Microsoft would come from Nebius’ Vineland, New Jersey data center, starting later this year. 

Arkady Volozh, Nebius’ founder and CEO, said the company’s core AI cloud business of serving customers from startups to enterprises is performing exceptionally well and that in addition to its core business, the company expects to secure significant long-term contracts with “leading AI labs and big tech companies.” The Microsoft deal was the first. 

“The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond,” Volozh said.

Nebius is already reaping the rewards of the Microsoft deal, reportedly worth $17 billion over six years, which sent the company’s stock surging 50% Tuesday. That was on top of its previous day’s 60% climb.

The AI infrastructure market is hot, as projected earlier this year. And it appears to be living up to those expectations. 

International Data Corp. released a report in February that found the market was on track for unprecedented growth, with spending projected to top $200 billion by 2028. It also discovered that organizations boosted their spending on compute and storage hardware infrastructure by 97% year over year during the first half of 2024 to the tune of $47.4 billion.

During its August earnings call, Nvidia announced record-level performance with the company’s Blackwell platform. During that call, executive vice president and CFO Colette Kress said we are at the “beginning of an Industrial Revolution that will transform every industry,” adding that by the end of the decade, we could see $3 trillion to $4 trillion in industry-wide AI infrastructure spend. 

Massive data center buildouts are driving that surge in spending by cloud service providers to power everything from large language models to agentic AI. It’s not just big tech companies fueling this spending; an increasing number of companies are buying land and building data centers to meet their own AI infrastructure needs as well as those of their customers.

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AI ADOPTION

The leaders and laggards of America’s AI economy

The Bay Area's grip on America's AI economy remains staggering — just two metro areas, San Francisco and San Jose, capture 13% of all U.S. AI job postings despite representing a tiny fraction of the country's urban areas. But a new Brookings report reveals an unexpected challenger emerging on the opposite coast.

Brookings categorized 387 metro areas into AI readiness tiers, with only San Francisco and San Jose earning "AI Superstar" status. Yet the analysis uncovered that Washington D.C., now accounts for 6.3% of AI job postings, just two-tenths of a percentage point behind the Bay Area's individual metros.

The East Coast corridor from DC to New York has quietly become a formidable AI cluster:

• The DC-NYC corridor houses 30% of all AI startups, with half in New York and the remainder spread across DC, Baltimore and Philadelphia

• Philadelphia had over 10,000 job listings requiring AI skills last year, with 5,166 AI-skilled workers starting new positions

• Detroit ranks 35th nationally for AI readiness, qualifying as an "Emerging AI Center"

Despite this diffusion, the geographic divide remains severe. More than half of the 387 metro areas surveyed fall into the bottom two readiness tiers, lacking basic AI talent pipelines and research infrastructure.

The Brookings researchers warn that this creates a "frontier hubs and broad hinterlands" pattern that could exacerbate regional economic inequality. While generative AI's low cost should theoretically democratize access, the report found only modest diffusion beyond primary AI centers, suggesting the digital divide is morphing into an AI divide with potentially lasting economic consequences.

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AI AGENTS

AI commerce gains ground among consumers

AI shopping tools have gone mainstream, with 61% of consumers now using generative AI tools like ChatGPT — nearly triple the number from 2024, according to Wildfire Systems' 2025 Consumer Shopping Trends Report.

A survey of 1,000 adults reveals that inflation-weary shoppers are primarily embracing AI as a tool for deal-hunting. Among AI users, 35% deploy these tools "almost always" or "often" when shopping online, with 54% using AI to compare prices and 41% to find deals.

The findings suggest that consumers aren't adopting AI shopping for novelty, but rather out of economic necessity. Deal hunting has emerged as shoppers' strongest strategy amid ongoing concerns about inflation, and AI tools are becoming their preferred method for finding savings.

Trust remains closely tied to financial incentives:

• 75% would trust AI recommendations if rewarded with cash back or purchase bonuses

• 86% would use an AI shopping agent, specifically if it provided money-saving benefits

• Only 35% of current AI users shop with these tools regularly, indicating room for growth

Despite growing adoption, significant concerns persist. Nearly half (48%) worry about data privacy, while 44% fear unwanted subscriptions. Another 41% are concerned about overspending, and 38% worry about product selection errors.

Wildfire Systems CEO Jordan Glazier noted that each of the company's four annual surveys has captured meaningful shifts as consumers navigated the pandemic, inflation, and now the adoption of AI.

The data suggests that AI shopping is moving beyond early adopters toward mainstream acceptance, but success will depend on platforms' ability to deliver tangible savings while addressing concerns about privacy and accuracy. For retailers, the message is clear: AI tools that help consumers save money will win adoption faster than those focused purely on convenience or personalization.

LINKS

• New bill would let AI companies seek exemptions from federal regulations

• Amazon joins the robotaxi race, hitting the road in Las Vegas 

• Bain is selling China data centers in $4 billion deal

• Senator Cruz proposes AI 'sandbox' to ease regulations on tech companies

• AI coding startup Replit valued at $3 billion with new funding

• Senator blames Microsoft flaws for U.S. hospital system hack

• AI for chemistry startup raises $100 million 

• Robotics startup Physical Intelligence in talks to raise at $5 billion valuation

• Nvidia-backed AI start-up Reflection nears deal for $5.5 billion valuation

• Google scraps some overseas cloud data transfer fees

• Apple extends free satellite connectivity access for some iPhone owners

• APAC regulators tighten oversight of AI in health care

• Latin American musicians say AI is stealing their streams

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