Nebius CEO Says Company Has Enough To Build Its Gigawatt, But Admits That “Some Of The Capital Sources Are Temporarily Closed”
Nebius CEO Arkady Volozh went on a podcast to reassure investors that his company can fund a gigawatt of AI capacity, but the words he chose to do it raised more questions than they answered.
Neocloud stocks drew attention Monday after Elon Musk said more than 200 of them face “guppy-level death and consolidation,” according to CNBC. Nebius Group (NASDAQ:NBIS | NBIS Price Prediction) traded at $158.73 as of 10:51 a.m. ET, roughly flat and down 0.01% on the day. That leaves the stock down 29.95% over the past month and still up 89.63% year to date.
Nebius’s own chief executive had already acknowledged part of Musk’s point. Per Stocktwits, an excerpt from Arkady Volozh’s podcast, recorded on the sidelines of the NVIDIA (NASDAQ:NVDA) GTC conference in Berlin last week, circulated on X on Sunday. He said some sources of capital had temporarily dried up, including “asset-backed financing or debt markets.” TradingView reported his words as “some of the capital sources are temporarily closed.”
Volozh Hedges His Own Funding Claim
He followed with a more confident line, per Stocktwits: “We have a pretty healthy balance sheet. We always thought about being more conservative here. But we’re working now with customer advances and several other instruments, which will probably provide us enough finance to build this gigawatt at least.”
“Probably” makes the funding a likelihood, and “at least” ties it to one gigawatt. On the August earnings call, Volozh set a larger goal: “Yes, we want to build a gigawatt capacity per year.” He said Nebius plans to start doing that in 2027.
Why Neoclouds Live and Die by Debt
A neocloud is a company that builds data centers and rents out AI computing power, mostly running on NVIDIA chips. The chips and buildings cost a great deal upfront. Returns come later, and only if customers pay enough to cover the borrowing costs and the cost of running the hardware. When lenders pull back, building slows. The suppliers one rung back from the chips, power, cooling, networking, keep profiting either way, and we rounded up seven of them in a free AI infrastructure report.
Per Stocktwits, Musk said debt markets have almost entirely shut off financing for companies without substantial revenue independent of AI data centers. He said SpaceX is outside that group, recently secured $40 billion in debt to buy NVIDIA GPUs, and has no interest in buying a neocloud.
Citi Loan Buys Time While Customer Contracts Carry the Weight
Nebius said Thursday it secured a $3.5 billion debt facility from Citigroup (NYSE:C) to fund data center expansion and GPU purchases. The loan matures in October next year and also covers general corporate purposes. Chief Operating Officer Ophir Nave said, per Stocktwits, “Sequencing our financing is how we optimize our long-term cost of capital,” and “We still have a range of capital sources available to us to finance the next phase of growth.” He pointed to $40 billion in long-term customer contracts that could serve as collateral.
Those contracts include large deals with Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META). Nebius’s second-quarter results filed with the SEC showed $37.5B in remaining performance obligations and $8.04B in cash. Customer advances do much of the work. Chief Financial Officer Dado Alonso said in August that Nebius expected more than $9 billion of upfront prepayments in 2026, and that Q2 deal terms covered approximately 50% to 60% of associated capex.
Both Sides of the Ledger
The conservative reading: the Citi facility runs about a year, funding leans on customer advances, and Volozh framed the gigawatt as likely. Concentration adds risk, with three customers making up 24%, 21%, and 14% of Q2 revenue. The constructive reading: Citi lent $3.5 billion into a market Musk calls closed, and hyperscale customers keep signing multiyear commitments. That puts Nebius in the group Musk described as still able to borrow. For background on how shares responded to the Citi deal, see our recent coverage of Nebius’s decline despite fresh Citi financing.
What to Watch Before the Citi Loan Comes Due
- Longer-term financing: whether Nebius replaces or extends the Citi facility with longer-dated debt before it matures next October.
- Executive commentary: further remarks from Nebius and other neocloud leaders on whether asset-backed and debt markets reopen.
- Lender behavior: how lenders treat neoclouds without contracts like Nebius’s Microsoft and Meta deals. A wave of distressed sales would support Musk’s consolidation call.
Volozh’s own words set the standard to measure against: enough capital for a gigawatt, probably. Every new financing announcement will show whether that “probably” firms up.
Contact [email protected] for any questions or corrections.
AJ spent 10 years writing about financial markets at The Motley Fool. His coverage centers on technology stocks and the broader macroeconomic trends, from interest rates to geopolitics, that shape where markets are headed next. AJ is drawn to the stories where big-picture economics and individual companies collide.
