Stay up to this point with free updates
Simply log in Artificial intelligence myFT Digest – delivered straight to your inbox.
Nebius, the bogus intelligence infrastructure group that spun out of Yandex's operations outside Russia earlier this yr, has raised $700 million from investors including chipmaker Nvidia to capitalize on skyrocketing demand for AI data centers.
The latest equity financing via a non-public placement comes six weeks after Nebius shares resumed trading on the Nasdaq after the corporate was spun off from Yandex, Russia's largest web company, in July. Other investors involved within the deal announced Monday include Silicon Valley enterprise firm Accel.
Nebius, led by boss Arkady Volozh, a rare Russian businessman who publicly condemned Moscow's invasion of Ukraine and has change into an Israeli citizen, said: “Now we’re completing our journey from the ashes in July to an actual company with real capital. “ .”
Nvidia's move to participate shows the “superb and deep relationship” between Nebius and the dominant AI chip supplier, Volozh said. The company plans to bring Nvidia's latest Blackwell series graphics processors online on its cloud service next yr.
“Of course, we hope that such a detailed relationship will help us get more quotas (of Nvidia chips), and faster,” Volozh added. “It (Nvidia's equity investment) has no direct connection to the acquisition of the GPUs, the deal just isn’t concerning the GPUs. But after all it shows our close relationship, which we hope will influence our pipelines.”
Two years after the launch of OpenAI's ChatGPT sparked a wave of investment in AI infrastructure, demand for computing capability to coach ever-larger models shows little sign of slowing. Nvidia has announced that demand will outstrip supply of Blackwell for many of next yr.
Nebius, headquartered in Amsterdam, is searching for to construct latest data centers equipped with Nvidia chips to coach and operate AI systems for purchasers similar to French AI group Mistral. It competes with other so-called AI “neocloud” services similar to Nvidia-backed CoreWeave, which has raised greater than $9 billion in equity and debt to this point, based on PitchBook, in addition to its U.S. rivals Lambda Labs and Crusoe.
By specializing in latest ways of constructing data centers that they are saying are higher suited to the needs of AI, Neocloud corporations are attempting to challenge the dominance of Amazon Web Services, Microsoft's Azure and Google Cloud within the cloud computing market .
Nebius' largest data center is in Mäntsälä, Finland, but Volozh told reporters on Monday that the brand new capital would fund its expansion plans within the United States next yr, where customer demand is stronger than in Europe.
“This just isn’t the last capital we are going to raise,” Volozh said, suggesting it could come back to market later next yr. “But we’re one in every of the few listed corporations (amongst AI neoclouds) that provides us cheaper access to capital.” . . I feel we’re one in every of the few or the just one on this latest cloud push that has no debt.”
Shares of US-listed Yandex were suspended in 2022 following Russia's full-scale invasion of Ukraine. After protracted negotiations with the Kremlin, Yandex struck a $5.4 billion deal in February to sell its core Russian business to a consortium of investors.
Nebius grew out of the remainder of Yandex's previous international operations. In addition to its concentrate on AI cloud computing, the group also features a self-driving automotive company, Avride, and an edtech service.
At the identical time as announcing the brand new funds, Nebius said it could cancel a planned share buyback, citing high volumes since Nasdaq resumed trading that may have allowed all Yandex-era investors to exit the stock in the event that they would have wanted this.
Following the equity financing, Nebius can have greater than $3 billion in money. The company said it expects its annual revenue to rise to $750 billion to $1 billion by the tip of next yr, up from its previous forecast of $500 billion to $1 billion.
