From Russian Roots to AI Cloud Innovator: Nebius’s Remarkable Journey
On October 21, a new ticker symbol NBIS appeared on the Nasdaq, marking the debut of Nebius, an emerging player in the AI cloud infrastructure arena. Unlike typical startups, Nebius’s path to the public market has been anything but ordinary.
The Silent Entry: A Public Startup Without the Fanfare
Casual observers might wonder where Nebius came from. There were no traditional IPO roadshows, no grand ceremonies, and hardly any buzz. That’s because Nebius is a unique entity—a public company that operates like a startup in every other sense.
A Glimpse into the Past
• 2011: Nebius, then known as Yandex N.V., went public as the Dutch holding company of Russia’s internet giant Yandex.
• 2021: Yandex N.V. reached a peak valuation of $31 billion.
• February 2022: Trading halted due to sanctions following Russia’s invasion of Ukraine.
• July 2023: Yandex N.V. restructured, offloading Russian assets and rebranding as Nebius AI.
Arkady Volozh Takes the Helm
At the forefront of Nebius’s new chapter is Arkady Volozh, Yandex co-founder and former CEO. Removed from European sanctions after condemning Russia’s actions, Volozh is now steering Nebius from its headquarters in the Netherlands.
Volozh’s Vision
• Capital Efficiency: “Building infrastructure is capital intensive,” Volozh noted.
• Public Market Advantage: Accessing capital via public markets is easier and cheaper, especially in the hot AI sector.
• Uncertainty and Opportunity: “We couldn’t predict what would happen… This has never happened before,” he admitted about the unprecedented Nasdaq re-entry.
Nebius’s Core Business: AI Cloud Infrastructure
Nebius focuses on selling GPUs-as-a-service to companies needing computational power for tasks like running algorithms and executing machine learning models.
Competitive Landscape
• Competes with giants like Amazon Web Services, Google Cloud, and Microsoft Azure.
• Direct rivals include alternative cloud startups like CoreWeave, which has raised significant capital this year.
Expansion Plans
• Europe: Launched a GPU cluster in Paris, operational this month.
• United States: Announced a new GPU cluster in Kansas City, Missouri, set for early 2025.
• Opened customer hubs in San Francisco and Dallas, with plans for New York by year’s end.
Diversified Portfolio: Beyond Cloud Computing
Nebius isn’t just about cloud infrastructure. Under the Nebius Group umbrella, there are three additional ventures:
1. Avride: Autonomous Vehicles
• Originated from Yandex’s self-driving unit.
• Now based in Texas with a team of 250 people.
• Partnered with Uber to introduce sidewalk food delivery robots and future self-driving cars.
2. Toloka: Generative AI and LLMs
• A Swiss-based company specializing in data labeling and quality control for large language models.
• Works with big names like Amazon and Hugging Face.
3. TripleTen: EdTech Platform
• An online coding bootcamp based in Wyoming.
• Aims to provide a “full stack of services” to AI companies, from infrastructure to education.
• Breaking even financially but not expected to be a major revenue driver.
Financial Performance and Market Reception
After resuming trading, Nebius experienced a volatile market response:
• Initial market cap significantly down from its pre-halt $18 billion.
• Stock fluctuated between $3.5 billion and $4.75 billion.
• Signs of stabilization suggest market confidence in Nebius’s potential.
Building for the Future: Data Centers and Infrastructure
Nebius owns a data center in Finland, with plans to triple its capacity to 75 megawatts.
Hybrid Approach
• Own Facilities: More efficient but time-consuming to build (up to two years).
• Co-location Facilities: Quicker to deploy, filling immediate needs.
• Global Expansion: Plans to build more data centers in Europe and the U.S.
The Road Ahead: Challenges and Opportunities
Nebius is navigating uncharted territory:
• Unique Position: A startup operating as a public company with a complex history.
• Capital Needs: Infrastructure demands significant investment.
• Strategic Partnerships: Especially for ventures like Avride, which may require billions in funding.
Volozh’s Outlook
• Optimism: Believes in building a substantial business despite uncertainties.
• Flexibility: Open to finding partners and possibly giving up control in certain ventures.
• Focus: Concentrating resources on the AI cloud infrastructure, the core revenue driver.
Conclusion: Nebius’s Bold Reinvention
Nebius represents a fascinating case of transformation and resilience. Rising from the complexities of international sanctions and corporate restructuring, it’s positioning itself as a significant player in the AI cloud infrastructure space.
With a diversified portfolio, strategic expansion plans, and leadership under Arkady Volozh, Nebius is a company to watch. Whether it can fully capitalize on the booming AI market remains to be seen, but its unique journey is already making waves.
Stay tuned—this is just the beginning for Nebius.
