Strategic Growth for Nebius Amidst AI Expansion
By Toby Sterling and Lucy Raitano
The Netherlands-based data center operator Nebius NBIS is poised to capitalize on substantial multi-billion-dollar agreements with tech giants Microsoft MSFT and Meta, as articulated by its co-founder.
This strategy aims to amplify its clientele, incorporating both established businesses and nascent AI enterprises that may emerge as future industry leaders.
A landmark $17 billion pact with Microsoft MSFT forged in September, alongside a $3 billion collaboration with Meta META, has propelled the company’s Nasdaq-listed shares upward by an impressive 248% this year, elevating its market capitalization beyond $25 billion.
In light of apprehensions regarding a potential AI bubble, Nebius is expanding its client base.
Roman Chernin expressed optimism during an interview with Reuters, stating that while fluctuations are inherent in technological revolutions, the demand for AI infrastructure could escalate ten- or even a hundredfold as companies begin to harness sophisticated AI models that are themselves rapidly evolving.
In anticipation of potential downturns, the firm, a smaller player in a burgeoning sector, is committed to fostering high-margin services and cultivating enduring client relationships.
“We must be prepared for the inevitable winter,” Chernin remarked, indicating that Nebius will position itself as a consolidator during challenging times.
Europe’s Foremost Neocloud Enterprise
Legacy enterprises are increasingly awakening to Nebius’ expansive suite of services, which spans diverse sectors such as manufacturing, retail, and banking. Chernin noted that pharmaceutical companies and financial institutions, particularly hedge funds, are adapting at an accelerated pace.
Boasting a partnership with Nvidia NVDA, Nebius stands out as Europe’s largest “neocloud” provider, delivering access to the potent yet costly graphics processing units (GPUs) essential for AI applications.
Moreover, the firm supplies the requisite software for optimized utilization and the operation of specialized AI applications, placing it in direct competition with traditional data center operators as well as U.S. giants such as Amazon and Google.
The United States ranks as Nebius’ top market in terms of revenue and installed capacity, although the company also operates data centers throughout Europe, including in the UK, Iceland, Finland, and France. By the end of 2026, it aims to secure 2.5 gigawatts of contracted power to meet surging customer demand across both regions.
Data revealed by real estate services firm CBRE indicates that capacity allocated to European “neocloud” providers surged by 211%, reaching 414 megawatts in the first three quarters of 2025 relative to the prior year.
Focus on Margin Over Revenue
Chernin emphasized that for Nebius, prioritizing margins rather than sheer revenue remains paramount during negotiations with hyperscalers.
“We perceive this as a comprehensive system; thus, our large agreements are constructed with financing for future endeavors in mind,” he elucidated.
Post the Microsoft agreement, Nebius successfully raised $4.2 billion through a combination of a public share offering and the sale of convertible notes.
The company’s initial clientele consisted of AI pioneers, including French model-maker Mistral, U.S. coding specialist Cursor, and German visual AI firm Black Forest—organizations positioned to become the next generation of major players, as stated by Chernin.
Projected growth in 2026 hinges on collaboration with existing digital firms that are early adopters of AI solutions, like Shopify, Prosus, and ServiceNow, which, historically reliant on U.S. cloud services, are now recognizing the benefits of Nebius’s specialized AI offerings, thus validating the firm’s business model.
Beyond 2027, Nebius aspires to extend its services to mainstream companies, a move Chernin argues would significantly enhance European sovereignty over data independence, rather than merely enticing U.S. enterprises to invest in large-scale data centers.
“Where will Siemens and BMW turn when they need to implement AI on a grand scale?” he questioned.
“Nebius’s ultimate ambition is to exist as a relevant entity within that market,” Chernin encapsulated.
Source link: Tradingview.com.
