Nov 11 (Reuters) - Nebius Group ( NBIS ) has signed a

deal worth about $3 billion with Meta to provide the Facebook

owner with AI infrastructure over a five-year period, the

company said on Tuesday, after it reported a more than fourfold

rise in third-quarter revenue.

The agreement with Meta underscores the surging

demand for high-performance computing power that is required to

build and run artificial intelligence models.

It is Nebius' ( NBIS ) second contract with a hyperscaler, following

its $17.4 billion deal with Microsoft ( MSFT ) in September.

Nebius ( NBIS ) said it would deploy the capacity needed for the Meta

contract over the next three months, adding that the demand was

so strong that the size of the contract had to be limited to the

capacity that Nebius ( NBIS ) had available.

Amsterdam-based Nebius ( NBIS ) is among a group of so-called

neocloud companies that offer hardware and cloud capacity as

services. Its core business involves providing Nvidia ( NVDA )

graphics processing units and AI cloud, helping companies expand

their AI infrastructure.

Nebius ( NBIS ) and its larger rival CoreWeave ( CRWV ) have seen

strong demand this year as insatiable AI appetite has left even

the biggest cloud companies, such as Microsoft ( MSFT ) and

Amazon ( AMZN ), with capacity constraints.

Like Nebius ( NBIS ), CoreWeave ( CRWV ) has also signed several

multi-billion-dollar deals with companies, including Meta and

ChatGPT maker OpenAI.

Nebius ( NBIS ) also reported a 355% jump in revenue to $146.1

million in the third quarter ended September.

The company is targeting $7 billion to $9 billion in

annualized run-rate revenue by the end of 2026, compared with

its ARR of about $551 million at the end of September.

"The only real limitation on our revenue growth in 2025 has

been the amount of capacity that we have been able to bring

online," founder and CEO Arkady Volozh said in a letter to

shareholders.

"In the last few months, we have worked very hard to unlock

this bottleneck, and we will continue doing so in 2026."

Its capital expenditures ballooned to $955.5 million in the

September quarter, from $172.1 million a year earlier, as the

company invests heavily in securing GPUs, land and power.