AI infrastructure company Nebius Group (Nebius) announced on Monday that it has entered into an agreement to raise USD 700 million in private placement financing from investors, including Nvidia, Accel, and certain accounts managed by Orbis Investments. The financing aims to accelerate Nebius’ previously announced plans to expand its AI infrastructure, encompassing large-scale GPU clusters, data centers, and tools and services for developers. The funds will also support the Nebius AI Studio, which offers affordable machine learning services to app developers.
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Investment to Expand AI Infrastructure
Arkady Volozh, founder and CEO of Nebius, said: "We have demonstrated the scale of our ambitions, initiating an AI infrastructure build-out across two continents. This strategic financing gives us additional firepower to do it faster and on a larger scale."
Nebius highlighted that its full-stack AI infrastructure is purpose-built to meet the demands of the global AI industry. Nebius' core AI infrastructure business has around 400 engineers with knowledge of building world-class tech infrastructure, as well as an in-house large language model (LLM) R&D team.
The Company is implementing an AI infrastructure build-out strategy that combines investments in build-to-suit data centers at greenfield sites with additional capacity deployments through colocations and the expansion of its existing facilities.
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Nebius GPU Cloud and AI Studio
The AI-native Nebius GPU cloud is designed to manage the complete ML lifecycle – from data processing and training through to fine-tuning and inference – all in one place. The recently launched Nebius AI Studio inference service expands the Company's offering to app builders, with access to a range of open-source models in a flexible, user-friendly environment at among the lowest price-per-token on the market, the company said.
In a statement, Nebius said it would issue 33,333,334 Class A shares at USD 21 per share in the private placement, representing an approximately 3 percent premium to the volume-weighted average price of those shares since trading resumed on Nasdaq. The closing of the private placement is subject to customary closing conditions.
Commenting on the transaction, John Boynton, Chairman of the Nebius Board, said, "Based on the strong level of investor engagement and technical dynamics which we have observed following the resumption of trading on Nasdaq, we believe that those shareholders who may have wanted to exit have had an opportunity to do so at a price higher than the maximum repurchase price authorised by shareholders."
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Reinvestment Strategy
The Board ruled out a previously planned share buyback, opting to reinvest in its AI business, citing strong post-Nasdaq trading activity. Boynton added, "The Board has determined that the best way to maximise value for the Company's shareholders is to invest our capital into our core AI infrastructure business, where the Company believes there is a substantial market opportunity."
The company has updated its financial guidance and now expects to achieve an Annual Recurring Revenue (ARR) of USD 750 million to USD 1 billion by the end of 2025. Goldman Sachs served as the placement agent and financial advisor for the transaction.
