Nebius plans $40 billion AI infrastructure buildout as financing risks mount

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Nebius $40B AI expansion

Highlights

Nebius plans to spend $40 billion in 2027 on AI infrastructure, funding up to 85% via customer prepayments and asset-backed loans tied to investment-grade contracts.
Delays at the Microsoft-backed Vineland data center push half of the contracted $19.4 billion capacity to Q2 2027, triggering potential financial penalties and contract risk.
Nebius cut its 2026 revenue forecast by $200 million to $3 billion due to third-party delays, despite Q3 revenue rising 571% year on year to $981 million and shares falling 17%.

Financing model faces delivery pressure

As reported by TechCrunch, Nebius says it plans to spend $40 billion in 2027 on AI infrastructure, funding most of the buildout through customer prepayments and loans backed by customer contracts. The company says total prepayments plus asset-backed financing tied to investment-grade contracts are expected to cover as much as 85% of its planned $40 billion to $45 billion capital expenditure for 2027.

Chief executive Arkady Volozh says building at this scale is difficult and that delays are currently part of the industry. Chief revenue officer Marc Boroditsky says deals with Microsoft and Meta include significant prepayments that arrive well before delivery, and adds that new agreements signed in the third quarter come with prepayments that more than cover the cost of building the related capacity.

Nebius ended the quarter with $7.4 billion in cash. The company forecast 2027 revenue of $12 billion to $13 billion and says it expects to break even on a pre-tax basis by the fourth quarter.

Microsoft-linked delays test expansion plan

Execution risk is emerging at one of Nebius's largest projects, a Microsoft-backed data center in Vineland, New Jersey, which is now months behind schedule. Nebius's contract with Microsoft is worth up to $19.4 billion, but only just over half of the Microsoft capacity is now planned for delivery by the end of this year, with the remainder pushed to the second quarter of 2027.

According to Andrey Korolenko, Nebius's chief product and infrastructure officer, the delay stems from DataOne, the third-party operator of the site, deciding to wind down temporary generation faster than expected as the facility switches to Bloom Energy fuel cells. The transition also comes after Floodlight reported in August that at least 45 natural gas generators were operating at the site without permits, and New Jersey regulators later fined the DataOne facility $1.1 million for violations of federal law.

According to Nebius's summary of its Microsoft contract, Microsoft can terminate affected service after a grace period if delivery dates are missed and no alternative capacity is offered, and the agreement includes financial penalties for late delivery. Nebius says Microsoft has been part of the planning process, but it does not say whether Microsoft has formally agreed to the revised dates.

Broader market signals are adding to investor concern. Bloomberg reported last week that Microsoft is tightening oversight of third-party data center projects, including those run by Nebius, IREN and Nscale, while Microsoft's own quarterly report says capital spending came in lower than expected because of third-party delays.

Nebius says the delays are limited to sites it does not control, and that data centers it is building itself are coming online on time or ahead of schedule. Still, the company cut its 2026 revenue forecast by $200 million to $3 billion because of delays at third-party sites such as New Jersey, even as third-quarter revenue rises 571% year on year to $981 million; shares end the day down 17%.

We have also looked at AI data center financing risks as U.S. projects run into delays, higher costs, and power constraints.

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