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Nov 12, 2026
Nebius Bets $40 Billion on AI—and Investors Flinch
Nebius is pitching its enormous data-center expansion as a bet backed by customer commitments and surging AI demand. But delays at a key site and a weaker near-term outlook have sharpened concerns about whether the company can build capacity fast enough to justify the spending.
Nebius shares plunged Thursday after the AI infrastructure company reported strong third-quarter revenue but raised its spending plans and lowered its 2026 forecast. The selloff followed a 15% rally the previous day, underscoring how quickly sentiment around the capital-hungry neocloud sector can turn.1
The company reported $981 million in quarterly revenue, up 571% from a year earlier and above analysts’ estimates. But Nebius now expects 2026 revenue at the low end of its previous range, reducing its forecast by $200 million to $3 billion. It also lifted expected 2026 capital spending to $27 billion, then outlined a $40 billion to $45 billion plan for 2027—well above analysts’ expectations.2
The scale of that ambition is colliding with delays. A New Jersey data center operated by third party DataOne is months behind schedule, pushing more than expected Microsoft capacity into the second quarter of 2027. Nebius said the site’s temporary power generation was wound down faster than anticipated; the facility has also faced regulatory penalties over unpermitted generators and a lawsuit from neighbors over noise.1
That puts pressure on a financing model built partly on customer prepayments and loans secured by customer contracts. Nebius CEO Arkady Volozh acknowledged the risk: “Building at this scale is hard, and delays are part of our industry right now. We are not immune.”1 Reporting has also pointed to Microsoft tightening oversight of outside data-center projects, even as Nebius says Microsoft has been involved in planning and has not publicly canceled its agreement.1
Nebius argues its finances can absorb the strain. It ended the quarter with $7.4 billion in cash, and executives said prepayments and asset-backed financing could cover as much as 85% of planned 2027 spending. The company expects $12 billion to $13 billion in 2027 revenue and says facilities it is building itself are on schedule. Investors, however, focused on the gap between that long-range promise and the delayed capacity weighing on the near-term outlook: shares fell about 17% on Thursday.1