Key Highlights
- Nebius successfully raised $4.34 billion through a convertible debt offering structured in two note tranches maturing in 2031 and 2033
- This financing follows a massive $27 billion supply agreement with Meta and a $2 billion investment from Nvidia
- The company intends to finance 60% of its expansion through customer prepayments from major clients like Meta and Microsoft
- Equity and debt financing will cover the remaining 40% of growth capital needs
- Capital expenditure projections for 2026 range between $16 billion and $20 billion
Nebius Group (NBIS) has successfully completed a $4.34 billion convertible debt offering, strengthening its financial position as it accelerates investments in AI infrastructure development.
The financing was structured across two separate tranches. Nebius issued $2.58 billion in notes carrying a 1.250% coupon and maturing in 2031 — this figure includes an additional $337.5 million upsized portion due to investor appetite. Alongside this, the company placed $1.75 billion in 2.625% notes set to mature in 2033, with provisions allowing for an additional $262.5 million uptake on the longer maturity notes.
According to Chief Communications Officer Tom Blackwell, the offering was expanded based on overwhelming investor interest. “We’ve managed to achieve a large amount of funding while really minimizing the dilution,” he commented.
This capital raise arrives during an exceptionally active period for Nebius. Earlier in March, the company completed a $2 billion warrant transaction with Nvidia, struck at $94.94 per share. Additionally, Nebius finalized an agreement potentially worth $27 billion to provide Meta with extensive data center infrastructure. These developments build upon a $17.3 billion supply arrangement with Microsoft executed last September.
Nebius stock ended Friday’s session at $117.62, while the convertible notes issued Monday feature a conversion price approximately 90% premium to that closing level.
Capital Allocation Strategy
Nebius has outlined a funding model where customer prepayments — predominantly from Microsoft and Meta — will cover 60% of expansion costs, while the balance will be sourced through a combination of equity raises and debt instruments. Blackwell indicated the company remains receptive to additional large-scale supply contracts if terms are favorable. “They can be a very efficient source of capital,” he noted.
The organization has established capital spending goals between $16 billion and $20 billion for 2026. According to Blackwell, Nebius now possesses sufficient funding to execute this strategy.
Addressing concerns about potential overextension, he stated, “As long as enterprise AI adoption does continue to increase… the need for what we’re doing is going to make sense.”
Expanding into AI Cloud Services
Beyond physical infrastructure deployment, Nebius views AI-powered cloud services as a critical long-term revenue driver. The strategy involves building software-as-a-service offerings atop its data center footprint — creating predictable recurring revenue streams that extend beyond infrastructure-only business models.
Blackwell emphasized that securing major contracts with industry leaders validates Nebius’s technical execution and operational capabilities, not merely its financial resources.
The company noted that both the Meta partnership and Nvidia investment materialized within the past month, highlighting the rapid acceleration of its business development pipeline.
While Nebius has not published detailed allocation plans for the convertible debt proceeds, management confirmed the capital will directly support ongoing data center construction and expansion initiatives.
The financing round reached completion on Monday, concluding a remarkable sequence of capital markets activity that has significantly elevated Nebius’s standing within AI infrastructure investment circles.
The 2033 maturity notes carry an interest rate of 2.63%, while the 2031 series features a 1.250% coupon.
