AI cloud provider Nebius has agreed to acquire AI search specialist Tavily, advancing its ambition to offer a unified platform for businesses and vertical AI developers to build and operate autonomous agents at scale.The transaction, whose financial terms were not disclosed, deepens Nebius’s push beyond infrastructure into higher-value software capabilities. By integrating Tavily’s AI-native search and retrieval technology, Nebius aims to provide developers with an end-to-end stack spanning compute, orchestration and real-time knowledge access, a combination increasingly seen as critical for enterprise-grade AI agents.
Nebius emerged from the restructuring of Yandex’s international assets and has positioned itself as a pure-play AI infrastructure company, focusing on GPU-based cloud services tailored for machine learning workloads. As demand for generative AI accelerates across sectors from finance to healthcare, cloud providers have raced to differentiate their offerings with software tools that simplify deployment and reduce reliance on third-party integrations.
Tavily, founded to address the limitations of traditional web search for AI systems, builds search APIs designed specifically for large language models and autonomous agents. Rather than returning conventional search results pages, Tavily’s system delivers structured, machine-readable outputs optimised for retrieval-augmented generation, allowing AI models to verify facts, cite sources and access fresh information in real time.
Industry analysts say the combination reflects a broader shift in the AI market. Early competition centred on access to high-performance GPUs and scalable infrastructure. Attention has now turned to the software layers that make AI systems reliable, secure and adaptable for enterprise use. Retrieval and search capabilities have become especially important as companies seek to reduce hallucinations and improve the factual grounding of generative models.
Nebius has invested heavily in expanding its GPU clusters and data centre footprint, targeting AI start-ups as well as established enterprises experimenting with autonomous workflows. By embedding Tavily’s search functionality into its cloud environment, Nebius plans to streamline the process of building AI agents that can gather information, reason over it and execute tasks with minimal human intervention.
Executives at Nebius have described their strategy as creating a vertically integrated AI cloud, combining infrastructure, model hosting and application-level tools. The addition of Tavily strengthens the application layer, potentially enabling customers to deploy agents capable of performing research, monitoring markets, generating reports or handling customer queries with access to up-to-date data.
Competition in this space is intensifying. Hyperscale cloud providers including Amazon Web Services, Microsoft Azure and Google Cloud have rolled out integrated AI platforms that bundle compute with model services and search capabilities. Meanwhile, specialist AI infrastructure firms are seeking partnerships or acquisitions to expand their software offerings and capture higher margins.
Market data shows sustained growth in enterprise AI spending, driven by automation initiatives and productivity gains. Research firms estimate that global spending on generative AI infrastructure and software will climb sharply over the next five years, with retrieval-augmented systems forming a significant share of deployments. Companies are increasingly wary of deploying standalone models without robust knowledge retrieval layers, given regulatory scrutiny and reputational risks associated with inaccurate outputs.
Tavily’s technology is designed to address these concerns by enabling AI systems to fetch and cross-reference information from authoritative sources before generating responses. Developers can customise search parameters, control data sources and integrate compliance filters, features that appeal to regulated industries such as finance and healthcare.
For Nebius, the acquisition could also enhance its appeal to vertical AI firms building domain-specific agents. Such firms often require tailored search capabilities to access proprietary databases or specialised content. Integrating Tavily’s APIs directly into Nebius’s cloud stack may reduce latency and simplify billing, offering a competitive edge against fragmented solutions that rely on multiple vendors.
Observers note that consolidation in the AI tooling market has accelerated as companies seek scale and defensible technology. Smaller AI start-ups with niche capabilities have become attractive targets for infrastructure providers aiming to broaden their platforms quickly. At the same time, valuations in the AI sector remain elevated, reflecting investor expectations of sustained demand.
While the financial details of the Nebius-Tavily deal remain private, the strategic logic aligns with industry trends towards integrated AI ecosystems. Enterprises increasingly prefer single-provider solutions that combine compute, orchestration and data access, reducing operational complexity and security risks.
Regulatory frameworks are also shaping product design. As authorities in Europe and elsewhere tighten rules on AI transparency and accountability, companies are under pressure to ensure that automated systems can trace and justify their outputs. Search-driven architectures that enable citation and verification are seen as part of that compliance toolkit.
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