NVIDIA Invests $2 Billion in AI Cloud Startup Nebius
▼ Summary
– NVIDIA is investing $2 billion in Nebius Group, an AI cloud company, through a warrant purchase that makes it a major shareholder and establishes a deep technical partnership.
– The strategic partnership focuses on deploying over 5 gigawatts of NVIDIA-powered compute by 2030, covering AI factory design, software development, and multi-generation infrastructure.
– Nebius, which emerged from the restructuring of Russia’s Yandex after the Ukraine invasion, will use the capital to develop its AI cloud platform and build new greenfield data centers.
– This investment follows a pattern of similar multi-billion dollar NVIDIA investments in AI infrastructure companies like CoreWeave, aimed at driving demand for its chips.
– Despite rapid revenue growth, Nebius is still reporting substantial net losses, and its stock trades at a high valuation multiple following the deal announcement.
NVIDIA has committed a substantial $2 billion investment into AI cloud specialist Nebius Group, marking a major strategic move to expand advanced computing infrastructure. This capital infusion, paired with a deep technical alliance, targets the deployment of over five gigawatts of NVIDIA-powered compute capacity before 2030. The arrangement strengthens a key partnership for NVIDIA, ensuring a significant customer for its latest hardware while providing Nebius with the resources to scale its specialized AI cloud platform aggressively.
The investment was executed through a private placement. NVIDIA acquired pre-funded warrants for over 21 million Class A ordinary shares in Nebius at a nominal exercise price, delivering approximately $2 billion in immediate gross proceeds to the company. NVIDIA agreed to a standard six-month lockup period on these warrants and any subsequent shares. This structure is noteworthy; it provides Nebius with crucial upfront capital while deferring the formal share issuance until NVIDIA decides to exercise the warrants, effectively making NVIDIA a major future shareholder.
This financial maneuver coincides with a broad strategic partnership announced by both firms. The collaboration spans several critical areas: AI factory design and support, where NVIDIA will provide early hardware access and engineering review; joint development of inference and agentic AI stacks using NVIDIA’s optimized software and models; multi-generation infrastructure planning, including early access to NVIDIA’s upcoming Rubin platform and related systems; and advanced fleet management utilizing NVIDIA’s monitoring tools to optimize Nebius’s large-scale operations.
Nebius plans to direct the $2 billion toward developing its full-stack AI cloud platform and constructing new, greenfield data centers. The company already operates multiple gigawatt-scale AI facilities in the United States. It recently received approval to begin building a massive 1.2-gigawatt AI factory on a 400-acre site in Missouri, with power delivery anticipated in the latter half of 2026.
NVIDIA founder and CEO Jensen Huang highlighted the deal’s focus on meeting the extraordinary compute demands of emerging agentic AI systems. Nebius CEO Arkady Volozh positioned his company as infrastructure built expressly for AI from its foundation, a pointed contrast to general-purpose cloud platforms adapted for AI workloads.
Nebius itself has an unconventional origin. It is the successor to Yandex N.V., the former Dutch holding company for Russia’s premier internet group. Following Russia’s invasion of Ukraine in 2022 and the ensuing EU sanctions, the company underwent a lengthy restructuring. In mid-2024, it sold its entire Russian operations for $5.2 billion, retaining only its international, AI-focused assets like cloud infrastructure, an autonomous vehicle unit, and several tech stakes. With sanctions on its CEO lifted and a Nasdaq relisting under the Nebius name completed, the company has fully pivoted to its new identity.
This $2 billion commitment significantly deepens an existing relationship. NVIDIA previously participated in a $700 million funding round for Nebius in late 2024, acquiring a small equity stake. The latest investment is an order of magnitude larger and formalizes the technical partnership with defined objectives.
The deal follows a recognizable pattern for NVIDIA. In early 2026, the chipmaker made a similarly structured $2 billion investment in cloud provider CoreWeave, also linked to a multi-gigawatt deployment pledge. NVIDIA has also recently announced multi-billion dollar investments in optical component firms and contributed significantly to funding rounds for leading AI labs like OpenAI and Anthropic.
Some industry observers note a circular dynamic: NVIDIA is investing vast sums into companies that will, in turn, use that capital to purchase enormous quantities of NVIDIA chips. This has sparked debate on whether these investments reflect pure strategic conviction or also serve as a method for managing and ensuring future demand.
Financially, Nebius is growing at a remarkable rate but remains deeply in investment mode. It reported Q4 2025 revenue of $227.7 million, a surge of over 500% year-on-year, alongside a net loss of $249.6 million for the quarter. The company spent $2.1 billion on capital expenditures, largely to secure NVIDIA’s H200 and Blackwell GPUs. It exited 2025 with an annualized recurring revenue run rate of $1.25 billion and projects that figure to reach between $7 and $9 billion for 2026. Following the investment announcement, Nebius’s market capitalization jumped approximately 16%, trading at a valuation that reflects high growth expectations despite current losses.
(Source: The Next Web)
