The co-founder of Russian technology conglomerate Yandex is launching a man-made intelligence company in Europe staffed largely by former company employees after the parent company struck a deal this week to withdraw from the country.
Arkady Volosh, certainly one of only two outstanding Russian businessmen to sentence Moscow's invasion of Ukraine, will lead Nebius Group, an AI infrastructure company and former Nasdaq-listed, Netherlands-based parent of Yandex.
The move is an indication of Volozh's efforts to salvage a few of Yandex's former international operations after Russia's war in Ukraine left the corporate in turmoil and compelled 1000’s of its employees to flee the country.
“It was obvious that not only could we not construct anything using Russian technology, but in addition that the Russian technology business would proceed by itself,” Volozh said in an interview with the Financial Times. “When all this happened, half of Yandex's top management and 10 percent of its developers were outside Russia.”
He added: “We saw a brand new opportunity… Finally, we’re free to do something recent.”
Volozh is leading 1,300 employees, mostly former Yandex employees, to construct Nebius, whose core business is developing a cloud computing platform specifically designed to support the training and running of large-scale AI models by startups.
According to Volozh, Nebius is already working with Europe's most outstanding AI startups in France and Germany, with 500 of its engineers focused on developing the corporate's specialized cloud infrastructure.
“We have engineers who’ve built large technical infrastructures (at Yandex) … we all know how you can do it very efficiently,” he said. “We know how you can connect supercomputers together … and we all know how you can construct really large clusters.”
The $5.4 billion sale of Yandex's core Russian assets – the most important exit by Western corporations from the country through the conflict – got here after lengthy, two-year negotiations that required President Vladimir Putin's personal approval for an asset the Kremlin considers strategically vital.
The company accomplished the cope with the assistance of Alexei Kudrin, a former finance minister with long-standing ties to Putin, whom it enlisted to barter with Sergei Kirienko, the Kremlin's domestic policy envoy.
The war in Ukraine derailed Volozh's ambitions to show Yandex – which at its peak had a market capitalization of $30 billion – into a world web giant. Key technology partners distanced themselves from the corporate and Nasdaq suspended trading in Yandex shares.
Yandex's core Russian business, which accounted for 95 percent of the group's revenue, assets and workforce, is now owned by a consortium that features members of the corporate's management team and several other Kremlin-approved investors.
The EU imposed sanctions on Volozh in 2022 due to Yandex's alleged complicity within the war.
Volozh resigned from his position as chairman of the board, transferred the voting rights of his majority stake to the board, and a 12 months later issued a press release saying the invasion was “barbaric and I’m categorically against it.”
After the separation from Yandex, he regained voting rights at Nebius.
The EU agreed this 12 months to not renew sanctions against Volozh, making him the primary person to be faraway from the list after speaking out against the war.
“I'm still in the identical place… I used to be there from the start,” Volozh said when asked about his anti-war statement.
“Many people modified their lives. And they only didn't need to stay, for a reason,” he said. “It wasn't that they were running away from the military… they left because they didn't want this to occur of their name. They didn't need to stay.”
Volozh, who moved to Israel in 2014 and is an Israeli citizen, hopes the enterprise will allow Nebius to leverage the engineering talent of former Yandex employees without facing the strict restrictions that apply to any Russian company in search of to do business within the West.
“We don’t have any connection, that’s zero,” he said. “There isn’t a byte or bit exchanged between us and our previous company. It is a brand new company, a brand new infrastructure, a brand new company.”
The Nasdaq-listed company has built clusters of tens of 1000’s of Nvidia chips in its existing data center in Finland and plans to triple its size to compete with major cloud providers comparable to Microsoft, Amazon and Google in the sector of AI applications.
Nebius touts a “strong long-term relationship” with leading AI chipmaker Nvidia, which can help it source powerful recent processors despite rising demand. Its data center houses a supercomputer that is alleged to be probably the most powerful in Europe.
“It's in (Nvidia's) interest to diversify its customer base; they're all in favour of developing people like us,” Volozh said. “We've been working with them for years. They know and trust us.”
Nebius has commissioned an audit from certainly one of the 4 major auditors to verify that the corporate now not has any ties to Russia, he added.
“You principally own the identical stocks, however it's a special company that has completely repositioned itself. We can now not give you access to the Russian IT ecosystem, but we are able to probably give you something far more interesting,” he said.
“We was big tech, which suggests you’ve gotten a really large ecosystem around you, a number of users generating a number of data. It's a special world,” Volozh said. “Then we emerged with nothing, like every other startup… that was a brand new, refreshing feeling.”
As a part of the split, Nebius retained three other internationally focused Yandex business units focused on data annotation and generation, education and self-driving cars, in addition to the information center in Finland and a few mental property licenses.
Developers were forced to reinvent major points of the projects on the fly, Volozh says, and rushed to maintain up with rapid AI-driven technological change while concurrently coping with the spin-off from Yandex.
“It was an ideal storm,” Volozh said. “They pulled people out of Russia and tried to rebuild the business, and in parallel the business model modified.”
The renamed Nebius has $2.5 billion in money and is debt-free following the sale of Yandex's Russian business, allowing the corporate to speculate a few of it in expanding the business and return “a significant slice” to shareholders.
Nebius will proceed to report back to the U.S. Securities and Exchange Commission (SEC), plans to appoint a brand new board of directors and hopes to resume trading on the Nasdaq “sooner or later” to draw further funding.
“We have a chance to construct something larger than has ever existed before,” Volozh said. “The scale of what we’re constructing suggests there will likely be billions of dollars of investment in the long run, through debt and equity. What we now have now … gives us a scale that I don't think exists in Europe outside of the massive tech sector.”
