Meta to Spend Up to $27 Billion on Nebius AI Infrastructure

Summary

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Bloomberg Intelligence Podcast

Episode: Meta to Spend Up to $27 Billion on Nebius AI Infrastructure
Date: March 16, 2026
Hosts: Paul Sweeney, Scarlet Fu
Guests: Ed Ludlow (Bloomberg Tech Co-host), Jen Bartash (Senior Retail Analyst, Bloomberg Intelligence), Michelle Korsmel (CEO, National Restaurant Association)

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Episode Overview

This episode explores Meta’s landmark deal to spend up to $27 billion on Nebius AI infrastructure, analyzing what the move signals for the future of AI, data center investments, and broader cloud computing trends. Additional segments examine OpenAI’s innovative financing ventures and offer expert takes on the latest earnings from Dollar Tree, as well as an in-depth discussion on the restaurant industry’s labor, tariff, and consumer headwinds.

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Main Discussion: Meta’s $27 Billion Investment in Nebius AI Infrastructure

Segment Start: [02:05]

Key Points

• Meta’s Mega Deal:

  • Meta plans to spend up to $27B over five years with Nebius Group, a neo-cloud provider focused solely on AI workloads.

  • $12B is committed upfront, marking a major, accelerated infrastructure buildup.

  • This follows a previous $3B deal—demonstrating Meta's strategy of diversifying cloud partners while developing its own AI chips internally.

    “It's $27 billion over five years, but upfront $12 billion next year for dedicated capacity. And that tells you that they've moved very quickly and it's a very serious arrangement.”
    — Ed Ludlow [03:13]

• What is Nebius Group?

  • Known as a "neo cloud" company: exclusive focus on AI/data center workloads.
  • Originated as part of Russia’s Yandex, now headquartered in Amsterdam after sanctions.
  • Its stock surged 13% after the deal, up 345% year-over-year.

• Meta’s Supply Chain Approach:

  • To avoid supply constraints, Meta buys AI chip capacity from multiple sources: Nvidia, AMD, as well as developing custom chips for specific internal use (e.g., ad recommendations).
  • “They have found that diversifying is the best way to get the compute needed for different workloads… The economics of designing your own chips make sense, particularly when it's for running internal workloads.”
    — Ed Ludlow [03:38]

• Industry Implication:

  • The deal illustrates the exploding demand for dedicated AI compute (neo-clouds), likely shaping how other tech giants will pursue infrastructure going forward.
  • The Nebius story charts the sector’s growth since 2022, driven by recognition of AI-specialized infrastructure.

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Notable Quotes & Memorable Moments

On Nebius’s Unusual Trajectory:

“It was previously associated with a property of Yandex, which is a Russian cloud computing company. And so... due to... sanctions, you know, it changed itself, is now an Amsterdam based company.”
— Ed Ludlow [04:44]

On Meta’s Internal AI Innovations:

“One of the chips they've come up with, for example, trains the algorithm that does ranking and recommendations — how ads show up in your timeline. That's very specific to them.”
— Ed Ludlow [03:58]

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Related Segment: OpenAI's $10B Joint Venture with Private Equity

Segment Start: [05:19]

Key Points

• OpenAI is in talks for a $10B off-balance sheet joint venture with private equity (PE) firms.

  • This allows OpenAI’s technology to reach a broader portfolio of companies under PE management, enhancing adoption and providing exposure for investors.

  • Off-balance sheet models like this may become more common for scaling enterprise platforms.

    “They’ve set up an entity where those private equity companies… can go to all the different companies that they own and… say, ‘Why don’t you guys use OpenAI stuff?’ It gives OpenAI a way of going to market…”
    — Ed Ludlow [05:29]

“This is the first real example I’ve seen of it. The idea has been spoken about in the corridors for a little while.”
— Ed Ludlow [06:25]

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Retail in Focus: Dollar Tree’s Mixed Results

Segment Start: [10:56]

Key Points

• Performance Overview:

  • Dollar Tree’s earnings in line, but revenue outlook slightly below expectations.
  • Trend of higher-income consumers trading down to value retailers continues, but traffic not as high as projected.

• Strategic Shifts:

  • New multi-price-point strategy ($3-$5 products) allows for better assortment and value.

  • Divestiture of Family Dollar completed; focus now on internal optimization and supply chain efficiency.

    “While they bring a much higher basket and they're… big adopters of that higher price point of three to five dollars, they're just not coming in as frequently…”
    — Jen Bartash [11:35]

“They started to pay a little bit more attention. They're really working at improving their supply chain efficiency. They're working at improving store level productivity…”
— Jen Bartash [13:39]

• Industry Competition:
  • Dollar General still undercuts with $1 items (>500 products).
  • Walmart, Target pushing value “alley” strategies but leverage wider assortment to compete.

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Industry Lens: US Restaurant Sector with Michelle Korsmel

Segment Start: [18:50]

Key Points

• Labor and Immigration:

  • Roughly 20% of US restaurant workers are foreign-born.

  • Immigration policy disruptions have tightened labor supply and impacted sit-down dining recovery.

  • High upward mobility in industry: “9 out of 10 restaurant managers started at entry level.”

    “One out of every five people that work in restaurants was born outside the US… So, we know that there's a lot of upward mobility.”
    — Michelle Korsmel [19:12, 20:11]

• Tariffs, Food Prices & Supply:

  • Tariff disruptions have stabilized in last six months; current major challenges are persistent food inflation and supply shortages (e.g., beef).

    “Food prices have been steadily increasing since before the pandemic, and that's something we're watching… We know we don't have enough cattle herd that exists today to meet the beef demand in the US.”
    — Michelle Korsmel [21:01]

• Credit Card Swipe Fees:

  • Growing issue: US has among the highest card processing fees globally, often passed to customers as surcharges.
  • “The US is the last nation really to have any kind of competition that exists between our credit card carriers... costing the average American at least $1,200 a year.”
    — Michelle Korsmel [22:05]

• Consumer Trends & Outlook:

  • Strong long-term fundamentals: 7 in 10 Americans would eat out more with higher disposable income.
  • Industry’s competitiveness drives quality upward, keeps prices in check.

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Additional Insights: Enterprise AI Adoption

Interspersed Commentary: [07:28, 08:18, 15:32, 16:23]

• Featured snippet from Arvind Krishna, IBM CEO (via Malcolm Gladwell interview):

  • Advice: Focus AI scaling on areas of highest impact (customer service, developer productivity).
  • The main challenge is not tech itself, but change management and process acceptance.

  “The biggest change is not technology, it's getting people to accept that there's a different way to do things.”
  — Arvind Krishna [07:28, 15:32]

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Timestamps for Major Segments

• Meta’s Nebius Deal & Market Impact:
  [02:05] – [07:06]
• OpenAI & Private Equity Structure:
  [05:19] – [07:06]
• Dollar Tree & Retail Analysis:
  [10:56] – [15:11]
• Restaurant Labor, Tariffs & Industry Trends:
  [18:50] – [23:11]

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Summary

The episode delivers a sweeping look at transformative investments in AI infrastructure (Meta/Nebius), the evolution of enterprise platforms (OpenAI/private equity), and the changing face of American retail and restaurants amidst shifting consumer behaviors and macroeconomic headwinds. Notable for its balanced analysis—grounded in real-time market reactions, expert insight, and practical business context—the show remains essential listening for anyone tracking the intersections of tech, finance, and commerce.

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Transcript

[Malcolm Gladwell]

The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM Being a

[Paul Sweeney]

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[Bloomberg Intelligence Podcast Host]

Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTub Boy.

[Paul Sweeney]

The tech news continues to come fast and furious. Let's get the latest with Ed Ludlow, B Tech co host. He's out there somewhere in California getting into trouble in Silicon Valley. And I want to start with the meta platform paying 20 as much as $27 billion for cutting edge artificial intelligence infrastructure from Nebulous Group. Nebulous group stocks up 13% today. All right, not bad. Up 52% year to date. Okay, better up 345% year to on a trailing 12 month basis. Ed, let's just start with the basics. What is Nebulous Group? What's going on over there?

[Ed Ludlow]

Yeah, it's what we call a neo cloud. It's a fancy way of saying it's a data center that just runs AI workloads, because prior to this point, lots of data centers have done all kinds of software and storage. And, you know, Matter is pursuing this kind of everything strategy. Meta is not a cloud computing company, but it has a lot of compute demand. And so it's buying loads of chips from Nvidia and AMD for its own data centers. It's working on its own chips in house that go into its own data centers, and then it's basically leasing or renting capacity from a number of other players. The difference with this Nebulous deal is

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like, it's really big.

[Ed Ludlow]

You know, it's $27 billion over five years, but upfront $12 billion next year for dedicated capacity. And that tells you that they've moved very quickly and it's a very serious arrangement.

[Paul Sweeney]

And it adds to its $3 billion deal with nebulous last year as well. You talk about Metta really diversifying and not betting on just any one company. Right. I mean, it's kind of spread its chips everywhere.

[Ed Ludlow]

Yeah. The idea is that in an environment where you are supply constrained, in other words, the demand that a company has for compute power is greater than what exists in the real world. They have found that diversifying is the best way to get the compute needed for different workloads. Matter is a very big and serious buyer of Nvidia chips. You know, it's, it's in the top five easily. But there is benefit to designing at scale. Like the economics of designing your own chips make sense, particularly when it's for running internal workloads. Right. When I visited Matters Chip Lab last week, one of the chips they've come up with, for example, trains the algorithm that, that does ranking and recommendations. In other words, how ads show up in your timeline, that's like very specific to them. And so it's, it's paid off the investment so far.

[Paul Sweeney]

I mean, just looking at the graph of this chart from Debbie, I mean, went public in 2011, kind of bouncing around, not doing anything. And then around the February of 2022, at the price of about $20 a share, people said, oh, this is an AI play. So we go from 20 to $128. Where was that call? Ed Ludlow.

[Ed Ludlow]

Well, there's also a history part of it which is that it was previously associated with a property of Yandex, which is a Russian cloud computing company. And so, you know, just simply due to. What's the word I'm looking for? I guess sanctions. You know, it changed itself, is now an Amsterdam based company. So that's a part of it, but it's completely, I'm visualizing the chart for our audio audience. But, but you know, it completely coincides with the birth of the NEO cloud and demand, specifically the data centers that just run AI.

[Paul Sweeney]

All right, here's another story that just recently crossed a Bloomberg terminal. Again, big numbers, Open air in talks for $10 billion joint venture with P E firms. What's up with that?

[Ed Ludlow]

Yeah, so we've just moved our own version of this story and what I'm told by sources is that basically it helps a lot for OpenAI to have some money that's off the balance sheet to go out there and find a vehicle, a mechanism to, to sell its software. And so what these guys are doing is they've set up an entity where those private equity companies in the first instance can go to all of the different kinds of companies that they own and are trying to make better in the classic style and say, you know what, why don't you guys use OpenAI stuff? It's pretty good. And so that gives OpenAI a way of going to market and it gives these private equity firms some exposure to OpenAI and a mechanism to do business with them to that also benefits all of their existing portfolio of investments.

[Paul Sweeney]

Do we think that this is going to be the template that it starts to use more of these off balance sheet ventures?

[Ed Ludlow]

Yeah, I think this is very interesting because like what I hear from time to time across Silicon Valley for all sorts of things is that there is benefit in having multiple entities, be that a geographic split or be a business line split. And in part because you you at scale with enterprises. The open air private story is about selling OpenAI's platform to different enterprise companies. It's just a sort of old archaic world where it seems like going back to that model is what is in favor. But this news that broke this morning is the first real example I've seen of it. The idea has been spoken about in the corridors for a little while.

[Paul Sweeney]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Malcolm Gladwell]

Hello.

[Paul Sweeney]

Hello.

[Malcolm Gladwell]

I'm Malcolm Gladwell, host of the podcast smart talks with IBM. I recently sat down with IBM's chairman and CEO Arvind Krishna and I asked him, how can companies use AI to its fullest potential to create smarter business?

[Arvind Krishna]

My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example, if anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30% more productive today with the goal of being 70% more productive. Yeah, so we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology, it's getting people to accept that there's a different way to do things.

[Malcolm Gladwell]

To listen to the full conversation, visit IBM.com smarttalks.

[Paul Sweeney]

Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto, and they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend small cap stocks with improving operating margins, or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market and paid for by Public Holdings Brokerage Services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete [e-mail] disclosures being a small

business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. That's why they make business growth their priority. The Chase team takes the time to understand your mission, where you are now and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools. Looking for tips and advice. Their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn [e-mail] business chase for business make more of what's yours. The Chase Mobile app is available for select mobile devices. Message and data rates may apply JP Morgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.

[Bloomberg Intelligence Podcast Host]

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Paul Sweeney]

One of the big movers was Dollar Tree. And the outlook here from Dollar Tree was kind of mixed because even though adjusted earnings per share is going to meet the average analyst estimate, the outlook for revenue came in a little bit light. So let's bring in Jen Bartash. She is our senior analyst covering retail staples and packaged foods. And Jen, we've seen these value retailers do pretty well in this current environment with a lot of higher income consumers trading down. Yet this sales view did miss the average analyst estimate. Is that because analysts investors have gotten a little bit ahead of themselves when it comes to the outlook here?

[Jen Bartash]

Well, it's a, it's a good question, Scarlett. You know, with regards to the overall revenue growth, growth for Dollar Tree, you know, last year was a real transition year for them. They shed the family dollar unit, they're refocusing, they've been investing in the business. But that trade down customer doesn't come all that often into stores. And so while they bring a much higher basket and they're taking their big, they're big adopters of that higher price point of three to five dollars, they're just not coming in as frequently as kind of the core low income consumer. And so I think the conservative view on the top line is that there are a lot of things going on right now. You've got, you know, fuel prices are on the rise, you've got consumers who are stretched and you've got a mixed behavior with regards to the types of households that are coming into Dollar Tree.

[Paul Sweeney]

So what's Dollar Tree and other dollar stores, how are they adjusting their strategies at all?

[Jen Bartash]

So with regards to strategy, one of the things that they really ran into trouble with and this is why they went beyond that $1 price point back in 2022 was being able to have a compelling variety of merchandise in the stores. And so the multi purchase, the multi price point strategy that Dollar Tree is rolling out has been really effective for them because it gives people slightly more choice of what's in the store and they can offer more compelling value. So that's been a tactic that's really paying off. It's just A question of, they're still in the process of rolling that out to all of their stores. So it's not everywhere yet. And so they're getting that bump as stores are adopting these, these higher price points. But once they're in all the stores, the question is how sustainable will it be. So that's one of the things that everyone is looking for.

[Paul Sweeney]

And Jen, one thing we know about Dollar Tree is that it has done better in terms of operations, in terms of performance because of this decision to divest its family dollar chain, which was begun last year. How far along that process is Dollar Tree? Is it, you know, halfway done, two thirds done, 100% done.

[Jen Bartash]

So the divestitures is done. The question is the refocusing on their own internal operations. So, you know, with regards to last year, they started to pay a little bit more attention. They're really working at improving their supply chain efficiency. They're working at improving store level productivity. They've invested in wages in the stores to help have more employees, employees there at the right times and to provide the right amount of customer service. But it's still early days for their overall transformation of the company now that it's back to being just a single banner. And so it will probably extend through this year that we see more of those tactics start to take hold and to have a real material impact on the business overall.

[Paul Sweeney]

What is Target? What is Walmart? What are they doing in response here?

[Jen Bartash]

What's really interesting, Paul, is that Dollar General as a direct competitor in the dollar store space, they talk about having over 500 items that are at the $1 price point or below. So they're actually undercutting Dollar Tree on some of that value play. If you go into a Walmart or a Target, when you first walk in, they have kind of those value alleys where they have low priced items right at the front where you can see them. So everybody has a strategy to try to show value through some variety that's at very low price points. But then when you get to the big box guys, their competitive advantage really is in the breadth of assortment that they carry. And if they can be compelling on value across the store, that puts them in a good position.

[Paul Sweeney]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Malcolm Gladwell]

Hello.

[Paul Sweeney]

Hello.

[Malcolm Gladwell]

I'm Malcolm Gladwell, host of the podcast smart talks with IBM. I recently sat down with IBM's chairman and CEO Arvind Krishna and I asked him, how can companies use AI to its fullest potential to create smarter business?

[Arvind Krishna]

My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example, if anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30% more productive today with the goal of being 70% more productive. Yeah, so we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things.

[Malcolm Gladwell]

To listen to the full conversation, visit IBM.com smarttalks.

[Paul Sweeney]

Support for the show comes from Public Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts? Yep. High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash all investing involves risk of loss. See complete [e-mail] disclosures small businesses are

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[Bloomberg Intelligence Podcast Host]

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am, EAS CarPlay and Android Auto with the Bloomberg Business app Listen on demand. Wherever you get your podcasts or watch us live on YouTube, we have a great guest here.

[Paul Sweeney]

Michelle Korsmel joins us. CEO of the National Restaurant Association. Michelle, thanks so much for joining us here. You know, one of the industries that was thought to be impacted or could be impacted severely by some of the change in immigration policy from this administration was the restaurant business. Has that in fact happened?

[Michelle Korsmel]

Well, it's interesting, Paul, when you look at last year, we had some growth, but not really strong growth. It was 4.6% nominal growth and less than 1% full time growth. And we know that that has a lot to do with the fact that consumers were a little bit more weary. The immigration policies and the immigration disruption definitely made a difference in restaurant business, particularly people coming to sit down in family dining. It's interesting when you think about immigration because one out of every five people that work in restaurants was born outside the U.S. many of those are citizens. Many of those obviously are fully documented and able to work. But in terms of an immigrant population, the restaurant industry very much represents that.

[Paul Sweeney]

So what are your operators telling you about? Maybe just their, their access to the ability to attract and retain labor. Has that been a challenge for them?

[Michelle Korsmel]

Yeah, it's always tough to find and retain the best labor. We're thinking about the value of working in restaurants as people are considering, do they go and work in healthcare, do they go and work in education? And people need to know that you can find a great career in restaurants. In fact, there's a lot of opportunity that exists. Eight out of every 10 restaurant managers started an entry level. And so we know, I'm sorry, 9 out of 10 started an entry level and 8 out of 10 owners started an entry level. So we know that there's a lot of upward mobility. So finding people to come in and then building that upward mobility is always a priority for restaurant operators.

[Paul Sweeney]

Michelle, talk to us about tariffs. We're going into year two of this uncertain tariff regime or situation. How is that impacting the restaurant industry? Has the industry figured out a way to kind of just deal with it?

[Michelle Korsmel]

Yeah, it's interesting. You talk about figuring out a way it has a little bit normalized that we have some disrupted prices. Food and beverage tariffs have been pretty stable for at least the last six months. And so that's provided some more continuity in terms of pricing. But food price is tough. Right. Food prices have been steadily increasing since before the pandemic, and that's something we're watching. So it's often more now about availability. We know we don't have enough cattle herd that exists today to meet the beef demand in the United States. So that has an impact on pricing. So we're seeing those types of activities impact food prices almost more than tariff activity today.

[Paul Sweeney]

I noticed going to restaurants more and more and more signs saying, we're going to charge you 3% more if you use a credit card versus cash. And that's a big, big issue now, not for me, because I walk around with a lot of cash. But for most people, the younger folks, they would know a $50 bill if they tripped over it. So, I mean, talk to us about these swipe fees and all that type of stuff.

[Michelle Korsmel]

Well, you are one of a quarter of restaurant patrons who uses cash, but the vast majority, 3/4, are using credit cards. And the US is the last country, nation really, to have any kind of competition that exists between our credit card carriers. And so without that competition, it allows those carriers to charge what we see is really high swipe fees, costing the average American at least twelve hundred dollars a year because of the swipe fees being higher in the US than say they are in Europe or in Asia. And so that's something that restaurant operators need to figure out how to account for is how do you manage 3, sometimes 4 or 5%, depending on a credit card swipe fees. And so those extra charges are helping people understand what a difference it makes when you're using a credit card as opposed to paying cash.

[Paul Sweeney]

So what's the longer term trend, Michelle, just in terms of people eating home versus eating out, I know that pandemic, you know, upended a lot of people's kind of how they do things. What's the longer term outlook?

[Michelle Korsmel]

Well, long term outlook for restaurants is always great. In fact, even today, we talk about the numbers in our state of the industry survey that shows that 7 out of 10Americans are saying they'd spend more money in restaurants if they had more disposable income. So you know that the demand is there, there's always a pent up demand. And people really like the taste and the flavor profile for restaurants, the convenience, the speed. With lives getting faster and busier, restaurants are definitely a win. The other thing that's great about restaurants is that it's a pretty competitive industry and that competition causes each restaurant to figure out how they can do better to get those customers in the door. So the quality of the food is going up, prices staying competitive. Restaurant industry is a great business.

[Bloomberg Intelligence Podcast Host]

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business App. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.

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