Nebius tests the neocloud playbook with $40 billion in planned spending
Nebius plans to fund its $40 billion AI infrastructure expansion through customer prepayments and loans, even as delays at a Microsoft data center raise questions about its financing model.
TL;DR
- Nebius plans $40 billion in spending for 2027, relying on customer prepayments and loans for financing.
- A critical data center project for Microsoft in Vineland, New Jersey is months behind schedule.
- The delay is attributed to the third-party operator DataOne winding down temporary generators faster than expected, a transition complicated by regulatory fines for unpermitted generators and a noise complaint lawsuit.
- Microsoft has the right to terminate the contract or impose financial penalties due to the missed deadlines.
- Other neocloud companies like Nscale are also facing delays and potential pullback from Microsoft.
- Nebius claims its own-built data centers are on schedule, and new deals have significant prepayments covering construction costs.
- Nebius's third-quarter revenue was $981 million, a 571% increase year-over-year, but it cut its 2026 revenue forecast by $200 million to $3 billion.
- The company's stock fell 17% after the earnings call.