Nebius plans 1 GW annual datacenter capacity from 2027 backed by debt and prepayments

Nebius is betting on a rapid ramp to 1 GW of annual datacenter capacity starting in 2027, a scale few providers can match. The plan requires $20 to 25B in capital expenditures in 2026 alone, with 800 to 1,000 MW of capacity expected online by year-end. However, revenue generation will lag behind deployment, as clusters take months to commission and onboard customers. This delay creates a cash-flow gap that Nebius aims to bridge with customer prepayments and debt financing.

To fund the expansion, Nebius is leveraging $9B in customer prepayments, essentially deposits for future capacity, and a $775M asset-backed debt facility secured by its GPUs and contracted cash flows. The debt is collateralized by the same accelerators Nebius rents out, a model that lowers borrowing costs but ties repayment to sustained demand. If utilization drops, the company’s ability to service debt could come under pressure, mirroring risks seen in other GPU cloud providers like CoreWeave.

Nebius’s revenue projections assume $20 to 25M per MW for medium-term leases and $40 to 50M for short-term leases, implying $20B per GW at the low end. These figures rely on high utilization and premium pricing, which may not hold if competition intensifies or AI workload growth slows. The company’s Q2 operating loss of $176M, up from $111M year-over-year, underscores the challenge of turning capex into profitable revenue.

The expansion also includes an asset-light model where partners finance and operate facilities while Nebius provides the platform and demand. This reduces upfront costs but shifts risk to partners and depends on Nebius’s ability to resell capacity at a markup. If margins compress, the model could unravel, leaving Nebius with stranded assets or unmet revenue targets. Engineers should monitor whether the company’s capacity pipeline materializes as projected or becomes constrained by financial or operational hurdles.