AI infrastructure firm Nebius Group has announced a fundraising initiative, raising $700 million in a private placement from notable investors, including Nvidia, Accel, and accounts managed by Orbis Investments. This funding comes as Nebius aims to enhance its capabilities in building the infrastructure necessary for artificial intelligence (AI) development.
What’s the purpose of the funding?
Former CEO of Yandex Arkady Volozh stated that the $700 million financing would provide Nebius with the resources needed to accelerate the development of clusters of graphics processing units (GPUs), cloud platforms, and other essential tools for AI developers. This investment is part of Nebius’s broader commitment to invest $1 billion by mid-2025, with the potential for additional investments as the company grows.
Financial details
Nebius plans to issue 33,333,334 Class A shares at a price of $21 per share in this private placement, which represents approximately a 3 percent premium to the volume-weighted average price of those shares since Nasdaq trading resumed. The financing round was reportedly oversubscribed, leading Nebius to revise its annualized run-rate revenue forecast for the end of 2025 to between $750 million and $1 billion, up from a previous estimate of $500 million.
Strategic decisions
In light of the strong investor engagement and market dynamics observed since the resumption of trading on Nasdaq, Nebius has decided to forgo a previously approved share buyback. John Boynton, chairman of Nebius’s Board, indicated that shareholders who wished to exit had the opportunity to do so at a price higher than the maximum repurchase price authorized by shareholders.
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Expansion plans
Currently, Nebius is leasing data center space in Kansas City, Missouri, and is considering further expansion in the United States, where more than half of its clients are located.
Moreover, Nebius Group’s recent funding round marks a significant step in its mission to build robust AI infrastructure, supported by major investors and a clear strategy for growth. The company’s commitment to substantial investments and expansion reflects its ambition to play a pivotal role in the evolving AI landscape.
Background on Nebius Group
Nebius was established in July 2024 following a $5.4 billion deal that split the domestic and international assets of Yandex, a major Russian internet company. Furthermore, the company was founded by Volozh. Following Russia’s invasion of Ukraine, trading in Yandex shares on Nasdaq was suspended, but Nebius later revived the listing as part of the asset split.
