Nebius Secures $700M to Expand AI Infrastructure in the U.S.

European AI infrastructure company Nebius, formerly known as Yandex N.V., has secured $700 million in a new round of funding aimed at fueling its growth in the U.S. The funding is part of a private placement and was led by a group of high-profile investors that included Nvidia, the Silicon Valley venture firm Accel, and asset manager Orbis. The deal for financing also comprises issuing 33.3 million Class A shares at $21 per share. That is, it reflects a 3% premium over the average stock price since Nebius resumed trading on the Nasdaq in October.

This comes a little over a month since Nebius’ re-listing on Nasdaq after being off the platform for three years due to sanctions imposed on Russia-linked companies. The Netherlands-based company, that was the holding entity of Yandex, Russia’s largest internet group, came to be known as Nebius after it divested from its Russian assets early this year. Since rebranding, Nebius has concentrated on a full-stack AI infrastructure to satisfy the growing need for cloud computing, particularly in the AI space.

AI Infrastructure for a New Generation

Nebius is looking to compete in the AI cloud infrastructure market, which caters to clients who need strong platforms to run their AI models. It competes with the major cloud players like Amazon Web Services (AWS) and Microsoft Azure, but it also competes with specialized AI infrastructure providers like CoreWeave, which has secured significant capital and is rapidly expanding its international operations.

The company’s growth strategy will include a mix of co-location facilities, shared data centers, and building its own greenfield sites, which will require significant capital investment. Nebius plans to expand its GPU-powered data centers to meet the growing demand for AI computing power and will add a new GPU cluster in Kansas City as well as a new co-location site in Paris. The company will also triple its flagship data center in Mäntsälä, Finland.

Financial Outlook and Strategic Growth

Prior to this round of financing, Nebius had $2.2 billion in the bank after selling its Russian assets. Part of that money was, however, originally meant for a buy-back program under which previous Yandex investors could cash out if they wanted to. Now, with the company separated from Yandex and having performed so well since returning to the market trading at about $21 a share, the buy-back proposal no longer made sense.

As a result, Nebius has canceled the buy-back program, freeing up additional capital for its ambitious expansion plans. The company now has close to $3 billion in available funds, which will be allocated toward building its infrastructure. But CEO Arkady Volozh stressed that further fundraising would be needed to meet the capital-intensive nature of the business, saying, “Technology and capital are two components of this business — I don’t worry about the technology, and the capital, I think, we will be able to raise.

Alongside being an AI cloud infrastructure platform company, Nebius has subsidiary initiatives ranging from its Texas-based automotive player Avride to the generative AI Netherlands-based startup, Toloka, and there is even an ed-tech platform out of Wyoming dubbed TripleTen. These supplementing endeavors are part and parcel of the company’s initiative to employ its infrastructure within a comprehensive scope of support technology directions.
Growth Prediction and Leadership Change End
The new funding in place, Nebius has revised its financial forecast. The company is now expecting to reach an annualized revenue run rate of $750 million to $1 billion by the end of 2025, having initially projected it to be at the range of $500 million to $1 billion. It represents both increased demand for AI infrastructure and the growing ability of the company to offer the most advanced solutions.

As part of the funding agreement, Matt Weigand, a partner at Accel, will join Nebius’ board of directors. He will serve in an observer role for now but is to be elected formally at the company’s annual shareholder meeting in 2025.

The Road Ahead for Nebius

This $700 million funding round further strengthens Nebius’ position as a leading player in the burgeoning AI cloud infrastructure market. The company is working hard to meet the growing demand for high-performance computing to support AI model training and deployment. As AI continues to gain traction across industries, Nebius’ specialized infrastructure for AI models positions it to capture a significant share of the market. The company is ready to push it hard with $3 billion in capital, while the CEO, Arkady Volozh, believes the company would need more investments if the business needs to be scaled quickly.

Nebius is clearly set to make rapid strides in the near future. It has a robust financial platform, new partnerships, and a diversified portfolio – resources and vision that will give the company a strong edge to be one of the world’s largest players in AI infrastructure. The company’s expansion into the U.S. and other markets is a key step in its strategy to become a leader in AI-powered cloud services, while ambitious plans for new data centers reflect the commitment to providing innovative, efficient solutions for clients.