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Meet Nebius, the AI company that Microsoft just spent $20bn on
Microsoft has just announced a $20 billion investment in Nebius, a company few people will have heard of before now. To put that figure into context, it’s more than twice the amount Microsoft paid to acquire Skype in 2011, and not far off the amount it paid for LinkedIn in 2016.
So who is this little-known company that Microsoft has made this massive investment in? Where did it come from and what does it do? We’ve got the answers.
What does Nebius do?
Nebius is an AI infrastructure company, providing huge data centres that are geared to cope with AI workloads.
It has data centres in a variety of locations around the globe including the UK, France, Finland and the US. Indeed, perhaps wary of triggering a US-first President Trump, the investment announcement mentions that Microsoft will be benefit from dedicated capacity at the company’s new data centre in New Jersey.
Nebius is keen to head off some of the environmental criticism levelled at AI data centres. Its facility in Finland, for example, is cooled from the surrounding air, while the heat generated by the massed ranks of GPUs is fed back into a heating system for local residents.
The company’s data centres are largely powered by Nvidia GPUs and it’s currently taking pre-orders for access to Nvidia’s GB200 NVL72 superchips announced last year.
Where did Nebius come from?
Nebius has an interesting backstory, to say the least. It was spun out from Yandex NV, the Russian equivalent of Google, providing search, maps and e-commerce services, among other things.
Yandex has a somewhat chequered history when it comes to information control. It’s been criticised for providing very partisan coverage of Russia’s war with Ukraine, for example, and the company has removed large amounts of information on the back of state censorship orders. Russian law also compels services such as Yandex to store and decrypt information about their users, and provide it to the FSB on request.
The Dutch parent company sold all the Russian-based businesses in 2024, and they continue to trade under the Yandex brand. The pazrent company was rebranded as the Nebius Group and now operates outside of Russia.
Who runs Nebius?
Nebius was founded and run by Arkady Volozh, the founder of Yandex.
Yandex’s rapid growth and ability to influence the opinions of the Russian public obviously brought the company and Volozh to Vladimir Putin’s attention, but it seems he was something of a reluctant oligarch and not part of Putin’s close circle. In fact, he left Russia in 2014 and settled his family in Israel.
Nevertheless, Volozh was sanctioned by the EU in 2022, because his company “promoted state media narratives” and deranked content critical of the Russian government.
Volozh immediately resigned as CEO of Yandex and later issued a statement that was critical of Russia’s war in Ukraine. That led Putin to wish him good health, a statement that Volozh sensibly didn’t take at face value, reportedly hiring a bodyguard for the first time.
Volozh was quietly removed from the sanctions list in 2024, making life more comfortable for investors such as Microsoft.
What will Nebius do with Microsoft’s money?
The money from the Microsoft investment will help Nebius build the new data centre in New Jersey, ticking a box for the US administration in the process.
“The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond,” Volozh said in a statement announcing the deal.
The company will need to take on additional debt to build new facilities, but the hefty Microsoft contract – worth an initial $17.4bn but with the potential to increase to $19.4bn – will allow it to borrow at reduced rates, Nebius claims.
The stock market certainly seems convinced. Nebius’s share price shot up by almost 70% on the back of the investment.
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Barry Collins
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