From TechCrunch · Rebecca Bellan · · 2m
Nebius bets forty billion on a risky financing model
The neocloud company plans massive 2027 spending backed by customer prepayments, but delays at key projects are already piling up.
In brief
The neocloud company plans massive 2027 spending backed by customer prepayments, but delays at key projects are already piling up. Nebius announced forty billion dollars in planned 2027 spending financed by customer prepayments and loans, but delays at major projects threaten the strategy. Originally reported by…
Nebius announces forty billion dollar spending plan
The neocloud company laid out forty billion dollars in planned spending for 2027 during its third-quarter earnings call Thursday, far exceeding Wall Street expectations.
Financing strategy relies on customer prepayments
Nebius plans to fund the buildout by relying on customer pre-payments and loans backed by customer contracts, essentially using the future value of its data centers to finance their construction.
CEO acknowledges delays are already happening
CEO Arkady Volozh said during Thursday's earnings call that building at this scale is hard and delays are part of the industry. "We are not immune," he stated.
“Building at this scale is hard, and delays are part of our industry right now. We are not immune.”
Microsoft cooling on delayed neocloud deals
Microsoft is cooling on neocloud deals that aren't delivering on time, a problem for Nebius whose financing strategy depends on timely repayments from customers.
Microsoft contract months behind schedule
Nebius' largest customer Microsoft is paying for AI computing capacity at a Vineland, New Jersey data center now months behind schedule. The contract is worth up to nineteen point four billion dollars.
New Jersey site faces regulatory and legal trouble
In August, Floodlight identified at least forty-five natural gas generators operating at the DataOne site without permits. New Jersey regulators fined the facility one point one million dollars for violating federal law.
Microsoft contract allows termination for delays
Microsoft can terminate affected service after a grace period if dates are missed and no alternative capacity is offered. The contract includes financial penalties for late delivery.
Nebius cuts 2026 revenue forecast by two hundred million
Nebius cut its 2026 revenue forecast by two hundred million dollars to three billion dollars, citing delays to third-party sites like New Jersey. Shares ended the day down seventeen percent.
Company forecasts break-even by late 2027
Nebius forecast twenty twenty-seven revenue of twelve to thirteen billion dollars and expects to break even on a pre-tax basis by the fourth quarter, despite current project delays.
The bottom line
Nebius announced forty billion dollars in planned 2027 spending financed by customer prepayments and loans, but delays at major projects threaten the strategy.
