Nebius: A Cloud Castle Built on Air?

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Hark! A new spectacle unfolds upon the stage of finance, a company calling itself Nebius, and a tale of fortunes promised, and perhaps, swiftly lost. It appears we are to believe that the very engine of artificial intelligence – that most modern of delusions – is not to be found in the cleverness of algorithms, but in the humble, and exceedingly costly, data center. A curious notion, is it not?

This Nebius, once known by a more Russian moniker – a detail conveniently shed like a winter coat – now fancies itself a purveyor of computational power. They propose to build, for a princely sum, the very foundations upon which these ‘intelligent’ machines shall stand. They speak of ‘full-stack AI cloud platforms,’ a phrase as weighty and opaque as a magistrate’s judgment. The company, it seems, intends to supply the digital bricks and mortar for a world increasingly obsessed with building castles in the air.

Their stock, they boast, has ascended a dizzying 190% in the past year. A remarkable feat, to be sure, but one should recall that bubbles, too, rise with impressive speed. The company’s revenue, they proclaim, is ‘jumping rapidly.’ One wonders if it is leaping forward with genuine progress, or merely tumbling headlong into the abyss of unsustainable growth.

The Transformation: From Yandex to Nebius

The story of this metamorphosis is, in itself, a comedy of errors. Once a Russian internet concern, entangled in the unfortunate affairs of a distant land, the company sought refuge from sanctions by rebranding itself. A convenient sleight of hand, wouldn’t you agree? Like a player shedding a troublesome costume, they donned a new guise, hoping to escape the scrutiny of a discerning audience.

Now, they present themselves as an indispensable part of the AI infrastructure, forging alliances with the titans of technology. A five-year pact with Microsoft, amounting to a staggering $19.4 billion, and a $3 billion arrangement with Meta Platforms. Impressive sums, certainly, but one might ask: are these contracts based on genuine need, or merely the result of a frantic scramble to appear at the forefront of the AI revolution?

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The Pace of Expansion: A Race Against Reality

Their recent earnings reveal a company growing with the fervor of a fever dream. Revenue has increased by a preposterous 355% in a single year. Yet, despite this apparent success, they remain firmly in the red, posting a net loss of $100.4 million. A curious accounting, wouldn’t you say? It seems they are spending fortunes to generate…well, promises. The CEO assures us that the only limitation on their growth is the availability of capacity. A convenient excuse, perhaps, for failing to deliver on extravagant promises.

They project a capacity of 220 megawatts by the end of 2025, expanding to a grand 800 megawatts to 1 gigawatt by 2026. Bold pronouncements, indeed. But one cannot help but wonder if these projections are based on sound engineering, or merely the boundless optimism of a man eager to impress his shareholders.

The CEO, Monsieur Volozh, proclaims his confidence in the company’s strategy and market demand. He claims that the only impediment to their revenue growth is the speed at which they can bring capacity online. A man of unwavering self-assurance, to be sure. One suspects, however, that the true limitations may lie not in physical capacity, but in the very foundations of their business model.

They anticipate a revenue run rate of $900 million to $1.1 billion by year-end 2025, soaring to $7 billion to $9 billion by 2026. Such figures are enough to make even the most seasoned investor dizzy. One can only hope that reality does not intervene to spoil the spectacle.

A Word of Caution: The Illusion of Growth

Building data centers is, undeniably, an expensive undertaking. But it is also, in the current climate of AI hysteria, a remarkably lucrative one. Nebius, it seems, is constrained only by its ability to scale. They are diligently raising billions to acquire GPUs, land, and the necessary infrastructure. They currently hold $4.8 billion in cash and equivalents, a sum that would tempt even the most cautious of spendthrifts.

I confess, I find myself observing this company with a mixture of amusement and skepticism. They are, without doubt, riding the wave of AI enthusiasm. But I suspect that this wave, like all others, will eventually break. I anticipate a few new deals, certainly. But I also suspect that the stock will reward its long-term investors with a lesson in the perils of speculative excess.

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2026-01-21 08:53