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Nvidia-Backed Nebius Stock Soars 50% on AI Infrastructure Deal With Microsoft

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Key Takeaways

  • Nebius Group inked a deal with Microsoft worth up to $19.4 billion to provide artificial intelligence infrastructure for the software giant’s new data center in New Jersey.
  • Microsoft agreed to pay Nebius $17.4 billion over five years, and could add another $2 billion for additional services or capacity.
  • Nebius said this was the first of what it expects to be similar contracts with big AI labs and tech firms.

Shares of Nebius Group (NBIS) soared 50% in early trading Tuesday after the artificial intelligence infrastructure company struck a deal with Microsoft (MSFT) that could be valued as much as $19.4 billion.

Microsoft agreed to pay the Nvidia-backed (NVDA) firm, which completed its split from Russian internet giant Yandex last year, $17.4 billion over five years to provide artificial intelligence infrastructure for a new data center in New Jersey.

Microsoft “may also acquire additional services and/or capacity” for another $2 billion under the agreement.

Founder and CEO Arkady Volozh said this was the first of what Nebius expects will be “significant long-term committed contracts with leading AI labs and big tech companies.”

With Tuesday’s surge, Nebius shares have more than tripled in value since the start of the year. Microsoft shares were up less than 1% in recent trading and have added close to 20% year-to-date.



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Augment Raises $85 Million for AI Teammate for Logistics

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Augment raised $85 million in a Series A funding round to accelerate the development of its artificial intelligence teammate for logistics, Augie.

The company will use the new capital to hire more than 50 engineers to “push the frontier of agentic AI” and to expand Augie into more logistics workflows for shippers, brokers, carriers and distributors, according to a Sept. 4 press release.

Augie performs tasks in quoting, dispatch, tracking, appointment scheduling, document collection and billing, the release said. It understands the context of every shipment and acts across email, phone, TMS, portals and chat.

“Logistics runs on millions of decisions—under pressure, across fragmented systems and with too many tabs open,” Augment co-founder and CEO Harish Abbott said in the release. “Augie doesn’t just assist. It takes ownership.”

Augment launched out of stealth five months ago, and the Series A funding brings its total capital raised to $110 million, according to the release.

When announcing the company’s launch in a March 18 blog post, Abbott said Augie does all the tedious work so that staff can focus on more important tasks.

“What exactly does Augie do?” Abbott said in the post. “Augie can read/write documents, respond to emails, make calls and receive calls, log into systems, do data entry and document uploads.”

Augie is now used by dozens of third-party logistics providers and shippers and supports more than $35 billion in freight under management, per the Sept. 4 press release.

Customers have reported a 40% reduction in invoice delays, an eight-day acceleration in billing cycles, 5% or greater gross margin recovery per load and, across all customers, millions of dollars in track and trace payroll savings, the release said.

Jacob Effron, managing director at Redpoint Ventures, which led the funding round, said in the release that Augment is “creating the system of work the logistics industry has always needed.”

“Customers consistently highlight Augment’s speed, deeply collaborative approach and transformative impact on productivity,” Effron said.

In another development in the space, Authentica said Tuesday (Sept. 9) that it launched an AI platform designed to deliver real-time supply chain visibility and automate compliance.

In May, AI logistics software startup Pallet raised $27 million in a Series B funding round.

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The race to power artificial intelligence

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The United States is experiencing a significant increase in electricity demand due to the rapid growth of artificial intelligence technologies. According to an analysis from Berkeley Lab, data centers currently consume about 4.4% of all U.S. electricity, a figure expected to rise sharply as AI models require more power. By 2028, over half of this consumption could be attributed to AI alone, equivalent to powering 22% of all U.S. households.

Most of this electricity is generated from fossil fuels, with data centers operating on grids that emit 48% more carbon than the national average, said a report from MIT Technology Review. While companies like Meta and Microsoft are investing in nuclear power, natural gas remains the primary energy source.

In response to the growing demand, President Donald Trump signed an executive order in April directing the Department of Energy to expedite emergency approvals for power plants to operate at full capacity during peak demand. The order also mandates the development of a uniform methodology to assess reserve margins and identify critical power plants essential for grid reliability.

Despite these measures, concerns remain about the U.S.’s ability to provide the 24/7 power required by AI, especially as China implements plans to ensure reliable electricity for data centers. According to reporting from Forbes, “the U.S. does not have a coherent and continuing energy plan of any type. China’s central planning allows for development and sustainability, while the U.S. approach to energy changes every four years”.



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House bill targets rising rural utility costs from AI data centers

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Surging utility bills linked to artificial intelligence data centers would get a closer look from a trio of federal agencies under a new bipartisan bill in the House.

The Unleashing Low-Cost Rural AI Act from Reps. Jim Costa, D-Calif., and Blake Moore, R-Utah, would require the Energy, Interior and Agriculture departments to examine the effect AI data center buildouts are having on rural America.

“AI Data Centers are expanding rapidly and using more energy and water than entire cities. That energy demand is driving up utility costs for consumers,” Costa said in a press release Thursday. “My legislation ensures we take a hard look at how this growth impacts rural communities that are powering the AI industry, and make sure families aren’t left paying the price.  

“But at the same time,” he continued, “it’s important that rural communities are not left behind in the new opportunities that AI data centers will provide for agricultural sciences and an improved ability to compete in this modern era.”

The rapid construction of AI data centers across the country — especially in rural areas — has led to a spike in energy demand that has dramatically driven up utility costs for consumers. The lawmakers’ press release cited a stat from PJM — the world’s largest energy market, spanning 13 states — that said data centers have led to an additional $9.3 billion in costs for ratepayers.

The AI Action Plan released by President Donald Trump in July featured several callouts to the importance of expanded energy capacity through streamlined permitting and fewer environmental regulations. The plan also sought to make federal lands “available for data center construction and the construction of power generation infrastructure for those data centers.”

Moore said in the press release that Utah is “a prime location” for AI infrastructure and data centers, but “cementing” the state’s innovation bona fides “will require identifying rural areas ready for data expansion, streamlining permitting for new energy projects, and promoting the co-location of data centers with energy facilities.” 

“These efforts will power our growing digital demands without passing costs on to families,” he added. “I’m grateful to partner with Representative Costa to introduce the Unleashing Low-Cost Rural AI Act to identify other areas of the country, like Utah, that will advance solutions to meet our energy needs.”

Under the bill, the Energy, Interior and Agriculture would team up to study the impact of AI data center expansions in rural parts of the country, in addition to identifying areas that appear to be strong candidates for tech expansion. They would also assess the impact data center expansion might have on consumer costs, as well as energy supply and reliability. 

The agencies would also be charged with examining ways current energy infrastructure may be upgraded to allow AI data centers to coexist alongside those power facilities. There will also be reviews of nuclear and geothermal energy, solar, wind and hydro power, battery storage, and carbon capture.

According to a piece published last month in the Tech Policy Press, global energy use by data centers has jumped 12% annually over the past seven years, with projections that it will more than double by 2030.  

“As providers of the largest and most compute-intensive AI models keep adding them into more and more aspects of our digital lives with little regard for efficiency (and without giving users much of a choice), they grow increasingly dependent on a growing share of the existing energy and natural resources, leading to rising costs for everyone else,” the authors warned.


Written by Matt Bracken

Matt Bracken is the managing editor of FedScoop and CyberScoop, overseeing coverage of federal government technology policy and cybersecurity.

Before joining Scoop News Group in 2023, Matt was a senior editor at Morning Consult, leading data-driven coverage of tech, finance, health and energy. He previously worked in various editorial roles at The Baltimore Sun and the Arizona Daily Star.

You can reach him at matt.bracken@scoopnewsgroup.com.



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