AI infrastructure firm Nebius Group has secured $700 million in a private funding round led by investors such as Nvidia, Accel, and Orbis Investments. The financing marks a critical milestone for the company, which has been ramping up efforts to expand its capabilities in artificial intelligence infrastructure since its inception in July 2023.
Nebius originated from the $5.4 billion division of Yandex’s domestic and international assets. Founded by Arkady Volozh, the former Yandex CEO, the company is focused on building advanced AI tools and infrastructure, including GPU clusters and cloud platforms. Volozh emphasized that the fresh funding would accelerate Nebius’ ability to scale up and deliver these technologies more rapidly.
The funding round saw Nebius issuing 33,333,334 Class A shares at $21 each, representing a 3% premium to the shares’ volume-weighted average price since resuming trading on Nasdaq. The private placement was oversubscribed, reflecting robust investor interest. As a result, the company revised its projections, targeting annualized run-rate revenue of $750 million to $1 billion by the end of 2025, up from its previous lower estimate of $500 million.
Nebius has committed $1 billion toward investments by mid-2025 but hinted at the potential for further capital deployment. In the United States, where over half of Nebius’ clients are based, the company has already begun leasing data center space in Kansas City, Missouri, and plans to explore additional expansion opportunities.
The company’s ambitious trajectory comes amidst a broader AI infrastructure boom. With Nvidia’s participation, a notable endorsement, Nebius is well-positioned to compete in the rapidly evolving AI landscape. This capital raise also prompted Nebius to abandon a share buyback program approved during the Yandex asset split. Board Chairman John Boynton cited the strong market response following the Nasdaq trading resumption as the rationale behind this decision.
Nebius Group’s $700 million capital raise underscores the growing appetite for AI infrastructure investments, particularly from heavyweight players like Nvidia. This funding is not just a financial boost; it’s a strategic endorsement of Nebius’ vision to dominate a highly competitive market. With its roots in Yandex and the leadership of Arkady Volozh, Nebius brings both technical expertise and a bold expansion strategy. However, its decision to forego a share buyback may raise questions about balancing shareholder interests with growth ambitions. As Nebius sets its sights on scaling AI tools and infrastructure, the challenge will be executing these plans efficiently while navigating the intense scrutiny that comes with such high-profile backing.
Featured image courtesy of BNN Bloomberg
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