Nebius plans to spend $40 billion in 2027, relying on customer pre‑payments and asset‑backed loans, as its $19.4 billion Microsoft deal falls behind schedule.
During its third‑quarter earnings call, Nebius disclosed a projected capital‑expenditure range of $40 billion to $45 billion for 2027, far exceeding Wall Street expectations. The ambition reflects the company’s drive to expand its data‑center footprint amid soaring AI compute demand.
The Russian‑based neocloud provider said the bulk of the new capacity will come from facilities it builds itself, while third‑party sites will supplement the remainder. In Q3, Nebius reported revenue of $981 million, a 571 % year‑over‑year increase, boosted by a one‑time payment tied to a new partnership model.
Nebius intends to fund most of the 2027 outlay through customer pre‑payments and loans secured by investment‑grade contracts. CFO Maria Del Dado Alonso Sanchez highlighted that the Microsoft and Meta agreements can be leveraged under this structure.
Company executives estimate that pre‑payments combined with asset‑backed financing will cover up to 85 % of the $40‑$45 billion capex budget. The remaining cash needs are expected to be met with the $7.4 billion cash balance reported at quarter‑end, plus any short‑term borrowing if required.
Microsoft remains Nebius’s largest customer, with a contract worth up to $19.4 billion for AI‑compute capacity at the Vineland, New Jersey data center. The project is now months behind schedule; just over half of the promised capacity is slated for delivery by year‑end, while the balance has been pushed to Q2 2027.
The delay stems from DataOne, the third‑party operator, which decided to wind down temporary natural‑gas generators faster than anticipated and switch to Bloom Energy fuel‑cell technology. This shift reduced interim power availability and extended the timeline.
Nebius’s contract summary states that Microsoft may terminate the affected service after a grace period if delivery dates are missed and no alternative capacity is offered. Late‑delivery penalties are also embedded in the agreement, and the original deployment windows of 2025‑2026 have been exceeded by the new Q2 2027 target.
Investigative outlet Floodlight identified at least 45 natural‑gas generators operating at the DataOne site without proper permits, prompting New Jersey regulators to levy a $1.1 million fine. Additionally, nearby residents have filed a noise‑complaint lawsuit alleging a constant humming noise from the facility.
Nebius’s shares fell 17 % on the day of the announcement, and the company trimmed its 2026 revenue forecast by $200 million to $3 billion, citing third‑party delays such as the New Jersey setback.
For 2027, Nebius projects revenue of $12 billion to $13 billion and expects to break even on a pre‑tax basis by the fourth quarter. Executives stress that its own‑built data centers are on schedule and will supply most of the new capacity from 2027 onward.
Bloomberg reported that Microsoft is tightening oversight of third‑party projects, including those with Nebius, IREN and Nscale, and is evaluating whether to sign new agreements. Microsoft also dispatched employees to the New Jersey site for on‑site assessments and noted lower capex spending in its own quarterly report due to partner delays.
TechTimes Perspective
TechTimes believes Nebius’s $40 billion capex roadmap signals a decisive bet on AI‑driven cloud services, but the heavy reliance on pre‑payments and asset‑backed financing introduces vulnerability if key projects, especially the Microsoft contract, continue to lag. For Vietnamese enterprises, a successful rollout could translate into more competitive cloud pricing, yet the risk of delayed capacity may push providers to raise rates to cover penalty costs. Investors should monitor the progress of Nebius’s self‑built data centers and Microsoft’s response to the revised delivery schedule over the next quarters.