Nebius Bets $40 Billion on 2027 While Microsoft Deal Slips

Nebius plans to spend $40 billion in 2027 — far more than Wall Street expected — and it intends to finance up to 85% of that through customer prepayments and loans backed by customer contracts. The neocloud laid out the plan on its third-quarter earnings call Thursday, but the strategy leans on projects that are already showing cracks.

The core mechanic matters here. Nebius is essentially borrowing against the future value of data centers that don't exist yet. If projects stall or customers walk, the financing model wobbles. CEO Arkady Volozh didn't pretend otherwise: "Building at this scale is hard, and delays are part of our industry right now," he said on the call. "We are not immune."

What's wrong with the Microsoft contract?

Microsoft, one of Nebius's largest customers, is paying for AI computing capacity at a data center in Vineland, New Jersey — a site now months behind schedule. The contract is worth up to $19.4 billion. Under its terms, Microsoft can terminate affected service after a grace period if delivery dates are missed and no alternative capacity is offered. The deal also carries financial penalties for late delivery.

The original tranches were slated for 2025 and 2026. Now, only just over half the Microsoft capacity is planned for delivery by year-end, with the rest pushed to Q2 2027 — well beyond the original window.

The delay traces to DataOne, the third-party operator of the site, which "decided to wind down the temporary generation faster than it was expected," according to chief product and infrastructure officer Andrey Korolenko, as the facility switches to Bloom Energy fuel cells.

That transition wasn't entirely voluntary. In August, the investigative outlet Floodlight found at least 45 natural gas generators running at the DataOne site without any operating permits. New Jersey regulators fined the facility $1.1 million, ruling the generator use violated federal law. DataOne also faces a noise-complaint lawsuit from nearby residents over a constant hum allegedly coming from the data center.

Is Microsoft pulling back?

The context is uneasy. Bloomberg reported last week that Microsoft is tightening oversight on third-party-run projects — including those of Nebius, IREN, and Nscale — and debating whether new agreements are worth signing. Microsoft sent employees to the New Jersey site, per Bloomberg.

Microsoft has acted on similar frustrations before. Bloomberg reported it won't exercise an option to more than double its Nscale agreement for a Texas data center, and it stopped being anchor customer for Nscale's planned Essex site after power delays. In its own quarterly report, Microsoft flagged lower-than-expected capex due to third-party delays.

Nebius said Microsoft "has been part of the planning process" for the revised dates, though it didn't say whether Microsoft formally agreed to them. Microsoft hasn't publicly canceled anything. Chief revenue officer Marc Boroditsky noted the Microsoft and Meta deals both carried significant prepayment that arrived long before delivery.

Where does the money come from?

Nebius's answer: customers and lenders. CFO Maria Del Dado Alonso Sanchez named Microsoft and Meta as contracts that can be financed through prepayments and asset-backed borrowing on investment-grade deals. Combined, those sources should cover up to 85% of the $40–45 billion 2027 capex. Boroditsky added that Nebius could "tap prepayments to shore up any additional cash requirements." The company ended the quarter with $7.4 billion in cash.

Nebius insists the delays come only from sites it doesn't control. Data centers it builds itself are on time or ahead of schedule, the company says, and those will supply most new capacity from 2027. New Q3 deals came with prepayments that more than cover their buildout costs, per Boroditsky.

What does this change for the numbers?

The quarter itself was a mixed picture. Revenue hit $981 million, up 571% year over year — though roughly a third came from a one-time payment tied to a new partnership model. Nebius cut its 2026 revenue forecast by $200 million to $3 billion, citing third-party delays like New Jersey. Shares closed down 17%.

Looking ahead, Nebius forecasts 2027 revenue of $12–13 billion and expects to break even on a pre-tax basis by Q4. Hitting that depends on whether its biggest customer tolerates a Q2 2027 delivery that's already outside the contract's original window — and whether lenders keep financing capacity that keeps slipping.