Nebius told investors on its third quarter 2026 earnings call that it plans to spend $40 billion to $45 billion on AI data center capacity in 2027, more than Wall Street had expected. The announcement came alongside a $200 million cut to Nebius’s 2026 revenue forecast, and its shares closed down 17% the same day, according to TechCrunch.
Nebius is one of several “neocloud” companies that rent out AI computing capacity to larger technology firms, competing with established cloud providers by building data centers faster and financing them differently. Its third quarter revenue came in at $981 million, up 571% from a year earlier, though roughly a third of that came from a one time payment tied to a new partnership structure rather than recurring business.
The company ended the quarter with $7.4 billion in cash. It now forecasts $12 billion to $13 billion in revenue for 2027 and expects to reach pre tax break even by the fourth quarter of that year.
Why did Nebius stock fall 17 percent?
Investors reacted to Nebius cutting its 2026 revenue guidance by $200 million to $3 billion, a drop the company attributed to delays at data center sites it does not directly control. One of those sites, run by a partner called DataOne in Vineland, New Jersey, is behind schedule after switching its temporary power generation to Bloom Energy fuel cells faster than planned, Nebius chief product and infrastructure officer Andrey Korolenko said on the call.
Nebius CEO Arkady Volozh told investors that building AI infrastructure at this scale is hard and that construction delays are common across the industry right now, adding that Nebius is not immune to them. Nebius has said its own, directly operated data centers remain on schedule or ahead of it, and that they will supply most of the new capacity coming online from 2027.
How is Nebius funding a $40 billion spending plan?
Nebius expects customer prepayments, combined with asset backed loans secured against investment grade contracts, to cover up to 85% of its 2027 capital spending. Its contracts with Microsoft and Meta are among those eligible for this kind of financing, Nebius’s finance chief said on the earnings call.
Nebius chief revenue officer Marc Boroditsky said prepayments collected from deals signed in the third quarter already more than cover the cost of building the capacity those deals require, and that the company could “tap prepayments to shore up any additional cash requirements” if needed.
What is at stake in Nebius’s Microsoft contract?
Nebius’s contract with Microsoft is worth up to $19.4 billion, and just over half of the committed capacity is now scheduled for delivery by the end of this year, with the remainder pushed to the second quarter of 2027. Nebius’s own summary of that contract, filed with US securities regulators, says Microsoft can terminate the affected service after a grace period if delivery dates are missed and no alternative capacity is offered, and that the contract includes penalties for late delivery.
Nebius said Microsoft has been part of the planning process around the revised dates, though it did not say whether Microsoft has formally accepted them.
The DataOne site itself has drawn separate regulatory scrutiny. New Jersey regulators fined DataOne $1.1 million after at least 45 unpermitted natural gas generators were found running at the Vineland facility in August, and nearby residents have filed a noise complaint lawsuit over the site’s operations, TechCrunch reported.
Microsoft is reportedly tightening its oversight of third party AI data center partners more broadly, according to Bloomberg reporting cited by TechCrunch. Microsoft has sent its own employees to the New Jersey site, is said to be debating whether to sign new agreements with outside operators, and has already declined to exercise an option that would have more than doubled a Texas agreement with a different partner, Nscale, after power delays there.
| Metric | 2026 | 2027 (forecast) |
|---|---|---|
| Revenue forecast | $3 billion (cut by $200M) | $12 to $13 billion |
| Planned capital spending | Not disclosed in this call | $40 to $45 billion |
| Profitability target | Not profitable | Pre tax break even by Q4 |
What happens next
Whether Nebius can hit its revised delivery dates at third party sites like the New Jersey facility will determine if its prepayment heavy financing model holds up, since the plan depends on capacity arriving roughly on schedule to keep cash flowing in. Microsoft’s own next earnings update, and any further word on whether it accepts Nebius’s new timeline, will be an early signal of how that is going.
Frequently asked questions
What is a “neocloud”? It is industry shorthand for a newer company, like Nebius, that rents out AI computing capacity (mostly GPU servers) to other technology firms, competing with established cloud providers by building data center capacity faster and financing it through contracts and prepayments rather than only their own balance sheet.
Why do customer prepayments matter so much to this plan? Nebius is relying on prepayments and loans backed by its contracts with customers like Microsoft and Meta to fund up to 85% of its 2027 spending. If capacity is not delivered on time, that financing structure comes under strain at the same time as costs keep rising.
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