Nebius bets $40 billion buildout on customer cash instead of its own

Nebius, a cloud computing company that rents out AI computing power, told investors on November 12 that it plans to spend $40 billion building out data center capacity in 2027. The figure exceeded what analysts on Wall Street had been expecting, according to TechCrunch.

To pay for it, Nebius is leaning on an approach other AI infrastructure firms, known as neoclouds, have also tried: collecting prepayments from customers and taking out loans backed by those customer contracts, rather than funding construction mainly with its own capital. Chief financial officer Maria Del Dado Alonso Sanchez said prepayments and this contract-backed financing are expected to cover up to 85% of the company’s $40 to $45 billion 2027 spending target, with Microsoft and Meta named as the customers whose deals support that financing.

The strategy depends on projects staying on schedule, and one of Nebius’s biggest commitments is already slipping. A data center in Vineland, New Jersey, built for Microsoft under a contract worth up to $19.4 billion, is running months late. Nebius chief product and infrastructure officer Andrey Korolenko said the delay stems from DataOne, the site’s third-party operator, winding down temporary power generation faster than planned as the facility switches to Bloom Energy fuel cells. Only slightly more than half of the Microsoft capacity is now expected by year-end, with the remainder pushed to the second quarter of 2027, well past the original 2025 and 2026 delivery windows written into the contract.

The New Jersey site has drawn separate scrutiny. Investigative outlet Floodlight reported in August that dozens of unpermitted natural gas generators were running there, and New Jersey regulators later fined the facility $1.1 million for violating federal law. Nearby residents have also filed a noise-complaint lawsuit over the site, according to TechCrunch.

Nebius said Microsoft has been part of the planning around the new timeline but did not say whether Microsoft has agreed to it. Bloomberg has reported separately that Microsoft is tightening oversight of third-party-run projects, including those from Nebius, IREN, and Nscale, and has pulled back from related commitments elsewhere, including an option to expand an Nscale deal in Texas.

What this means

Nebius’s financing plan only works if prepaying customers keep paying and projects keep shipping on time. The company says its own data centers are ahead of schedule and will supply most of its 2027 capacity, but the Microsoft-linked delay shows how exposed it still is to contractors it doesn’t fully control. Whether Microsoft tolerates the slippage or starts pulling back, as it has with other neocloud partners, is not yet known.

Nebius ended the quarter with $7.4 billion in cash and forecast 2027 revenue of $12 to $13 billion, with a break-even target by the fourth quarter of that year. It cut its 2026 revenue forecast by $200 million to $3 billion, pointing to the third-party delays, and its shares fell 17% on the day of the announcement.