In a significant move for the artificial intelligence (AI) landscape, Nebius Group (NBIS) announced a $700 million private placement on Monday, with major players like Nvidia (NVDA), Accel, and Orbis Investments leading the charge. This capital injection underscores the growing importance of AI infrastructure and the confidence global investors have in Nebius’s vision.
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A Rising Star in AI Infrastructure
Nebius, founded by Arkady Volozh, the former CEO and founder of Russian internet giant Yandex, has quickly positioned itself as a pivotal player in the AI space. The company emerged in July 2024 after a landmark $5.4 billion deal split Yandex’s domestic and international assets, with Nebius focusing on building the infrastructure essential for AI development.
The company has ambitious goals, with Volozh stating that the new funding will accelerate the construction of cutting-edge clusters of graphics processing units (GPUs), cloud platforms, and other critical tools for AI developers. With plans to invest at least $1 billion by mid-2025—and potentially more—Nebius is doubling down on its commitment to fueling AI advancements.
Expanding in the U.S.
As part of its rapid growth strategy, Nebius is expanding its footprint in the United States, where over half of its clientele resides. The company is already leasing data center space in Kansas City, Missouri, with further expansions likely as demand continues to soar. This strategic move positions Nebius to capitalize on the U.S.’s robust AI ecosystem and growing market for high-performance computing services.
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Details of the Capital Raise
The $700 million raised in this round came through the issuance of 33,333,334 Class A shares at $21 per share—a 3% premium to the volume-weighted average share price since Nebius resumed trading on Nasdaq. The financing was oversubscribed, reflecting strong investor confidence. Nebius’s Board Chairman, John Boynton, highlighted this enthusiasm, noting that the demand demonstrated the robust investor appetite for the company’s growth story.
From Suspension to Resurgence
Nebius’s journey has been anything but conventional. Trading in Yandex shares was suspended on Nasdaq following Russia’s invasion of Ukraine, leading to the eventual asset split and the revival of the listing under Nebius. This bold move not only helped the company navigate geopolitical challenges but also allowed it to emerge as a global AI contender.
In an unexpected turn, Nebius announced it would no longer pursue the share buyback plan approved during the asset split. Boynton explained the decision, citing the strong investor engagement and higher-than-anticipated trading prices since Nasdaq trading resumed. “We believe that shareholders who may have wanted to exit have had an opportunity to do so at a price higher than the maximum repurchase price authorized,” he said.
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The Road Ahead
With this latest funding round, Nebius has raised its annualized run-rate revenue projections to between $750 million and $1 billion by the end of 2025, a sharp increase from its earlier estimate of $500 million. This growth trajectory cements Nebius’s place as a rising leader in the AI infrastructure sector.
Nvidia’s participation in the funding round further validates Nebius’s potential. As one of the world’s leading players in GPU technology, Nvidia’s investment signals a strong partnership that could amplify Nebius’s ability to deliver high-performance AI tools and services.
A Bold Vision for the Future
With its newfound “firepower,” as Volozh puts it, Nebius is poised to scale faster and tackle AI’s most demanding challenges. As the company continues to invest heavily in infrastructure and expand its reach, Nebius is not just keeping pace with the AI boom—it’s helping shape its future.
This $700 million investment marks a defining moment for Nebius and its backers, including Nvidia, and positions the company as a key driver of innovation in the global AI race.
