Nebius Outlines $40 Billion 2027 Capital Expenditure Plan Amid Data Center Delays
Neocloud infrastructure provider Nebius announced plans to allocate $40 billion in capital expenditures during 2027 to construct artificial intelligence data centers, according to TechCrunch. The capital deployment targets total infrastructure spending between $40 billion and $45 billion, significantly exceeding consensus projections from Wall Street financial analysts. The corporation intends to finance the ambitious expansion by utilizing customer advance prepayments and credit facilities backed by long-term customer computing contracts. Nebius forecasts that prepayments alongside asset-backed loans tied to investment-grade agreements will fund up to 85% of its total 2027 capital expenditure requirements. Chief Executive Officer Arkady Volozh stated during the earnings call that building at scale is difficult, acknowledging that construction delays currently affect the broader industry.
Project Delays and New Jersey Facility Challenges
The capital-intensive strategy faces operational headwinds as key third-party construction projects experience delivery delays, including at a facility in Vineland, New Jersey. Nebius holds a commercial computing agreement with Microsoft valued at up to $19.4 billion to supply dedicated artificial intelligence processing clusters. However, delivery schedules have slipped, with slightly more than half of the contracted capacity slated for deployment by the end of 2026 and remaining tranches postponed until the second quarter of 2027. The delays occurred after third-party site operator DataOne prematurely phased out temporary generation while transitioning the facility to Bloom Energy fuel cells. Nebius entered into a loan facility bearing interest at Term SOFR plus an initial margin of 2.75% per annum, subject to a minimum liquidity financial covenant, according to Stock Titan.
Regulatory Penalties and Environmental Scrutiny
The operational transition at the New Jersey campus followed investigative disclosures revealing that DataOne operated at least 45 natural gas generators without required environmental permits. New Jersey environmental regulators subsequently penalized the facility operator with a $1.1 million administrative fine for federal regulatory violations. DataOne is also confronting civil litigation filed by local neighborhood residents over persistent acoustic humming generated by data center power hardware. Under contractual terms, Microsoft maintains rights to terminate delayed service allotments after specified grace periods if alternate computing capacity is not delivered. Contract tranches were originally intended for deployment across 2025 and 2026, meaning the revised 2027 delivery schedule falls significantly beyond the initial deployment timeline.
Financial Results and Lowered Annual Guidance
For the third quarter, Nebius reported total revenues of $981 million, marking a 571% increase from the corresponding prior-year period and ending with $7.4 billion in cash reserves. However, management reduced its full-year 2026 revenue guidance by $200 million to $3 billion, citing execution delays at non-controlled third-party data center locations. Looking ahead, the company projected 2027 full-year revenue of $12 to $13 billion and anticipates achieving pre-tax profitability by the fourth quarter of 2027. Following the earnings conference call and guidance adjustment, shares of Nebius tumbled 17% during Thursday trading. Nebius announced it will discontinue reporting annualized recurring revenue and will guide on revenue and pre-tax earnings from 2027, according to MLQ.ai. At the end of 2025, Nebius held $3.7 billion in cash reserves before growing its position to $7.4 billion at the end of September 2026, according to DutchStartup.ai.