Nebius has outlined plans to spend between $40 billion and $45 billion on artificial intelligence infrastructure in 2027, a substantially larger investment programme than Wall Street had anticipated. However, delays at major data center projects and growing scrutiny from Microsoft are raising questions about whether the neocloud provider can deliver the capacity needed to support its expansion.
The company’s third-quarter earnings call on Thursday revealed a financing strategy built heavily around customer prepayments and loans secured against long-term customer contracts. The approach allows Nebius to use anticipated revenue from future computing capacity to fund data center construction, reducing the amount of capital it must raise directly.
But the model depends on projects being completed on schedule and customers receiving the computing capacity they have contracted to use. Delays can leave Nebius carrying construction and financing costs while the revenue expected to support those investments is postponed.
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“Building at this scale is hard, and delays are part of our industry right now,” CEO Arkady Volozh said during the earnings call. “We are not immune.”
That admission comes as Microsoft reassesses its relationships with third-party data center operators, including Nebius, amid concerns that some projects are failing to deliver capacity on time. Microsoft is one of Nebius’ largest customers and has committed to a contract worth up to $19.4 billion.
A major source of uncertainty is Nebius’ data center project in Vineland, New Jersey, operated by third-party provider DataOne. The facility is already months behind schedule, forcing Nebius to revise the timeline for delivering computing capacity to Microsoft.
Only slightly more than half of the contracted Microsoft capacity is now expected to be delivered by the end of this year, with the remainder scheduled for the second quarter of 2027.
Andrey Korolenko, Nebius’ chief product and infrastructure officer, attributed the delay to DataOne’s decision to wind down temporary power generation earlier than expected as the facility transitions to Bloom Energy fuel cells.
The transition has been complicated by regulatory and community disputes. In August, investigative publication Floodlight identified at least 45 natural gas generators operating at the DataOne site, although the facility had not received permits to operate them. New Jersey regulators subsequently fined the facility $1.1 million, finding that the generators’ use violated federal law, according to TechCrunch.
DataOne is also facing a lawsuit from nearby residents over alleged noise pollution from a constant humming sound associated with the data center.
These issues illustrate the practical constraints facing the AI infrastructure industry. Securing land, computing equipment and customer contracts does not guarantee that a data center will become operational on schedule. Power availability, environmental compliance, local opposition and regulatory approvals can all delay projects, creating financial exposure for operators and their customers.
The Microsoft agreement also contains provisions that could complicate Nebius’ position. According to the company’s summary of the contract, Microsoft can terminate affected services after a grace period if delivery dates are missed and alternative capacity is not provided. The agreement also includes financial penalties for late delivery.
The original deployment schedule covered 2025 and 2026, meaning the revised second-quarter 2027 timeline extends beyond the initial delivery window.
Nebius said Microsoft had been involved in the planning process, but did not confirm whether the technology company had formally accepted the revised dates. Microsoft has not publicly announced the cancellation of the agreement.
Microsoft’s Changing Approach Raises Financing Concerns
The delivery problems come as Microsoft increases oversight of infrastructure projects managed by external providers.
Bloomberg reported last week that Microsoft was tightening supervision of projects involving Nebius, IREN and Nscale, while considering whether to enter additional agreements with third-party data center operators. Microsoft has also sent employees to the New Jersey site, according to the report.
Microsoft’s latest quarterly earnings report provided another indication of the effect of infrastructure delays. The company said its capital expenditure was lower than expected because of delays involving third-party projects.
Other developments involving Nscale suggest Microsoft is willing to reconsider commitments when infrastructure delivery falls behind schedule. Bloomberg reported that Microsoft would not exercise an option to more than double its agreement for a Texas data center and had stopped serving as the anchor customer for Nscale’s planned Essex facility following power-related delays.
These developments affect Nebius because its financing model increasingly depends on the reliability of customer contracts. Lenders can provide capital against investment-grade agreements when they have confidence that the contracted revenue will materialize. If projects are delayed or customers reconsider commitments, the assumptions supporting that financing become less secure.
Marc Boroditsky, Nebius’ chief revenue officer, said during the earnings call that the company’s agreements with Microsoft and Meta included substantial prepayments, which arrived well before the contracted computing capacity was delivered.
Nebius maintains that delays are concentrated in facilities operated by third parties, while data centers it is developing directly are coming online on schedule or ahead of schedule. The company expects those internally developed facilities to provide most of its additional capacity from 2027.
Boroditsky also said prepayments attached to new contracts signed in the third quarter more than cover the cost of developing the capacity required to fulfil them.
The company ended the quarter with $7.4 billion in cash, providing a substantial liquidity reserve as it prepares for its expansion.
$45 Billion Spending Plan Depends on Customer Financing
Nebius expects customer prepayments and asset-backed financing secured against investment-grade contracts to cover as much as 85% of its projected $40 billion to $45 billion capital expenditure in 2027.
Chief Financial Officer Maria Del Dado Alonso Sanchez identified Microsoft and Meta as customers whose contracts could support this financing structure. Boroditsky added that the company could “tap prepayments to shore up any additional cash requirements.”
The strategy reduces the need to fund the entire infrastructure programme through equity issuance or conventional corporate borrowing. However, it also ties the company’s financial flexibility to the timing and performance of its contracted projects.
A delay in commissioning a facility can create a mismatch between expenditure and revenue. Nebius may need to continue paying for equipment, construction and financing while waiting for the capacity to become available for customer use. If a customer exercises contractual termination rights or changes its plans, the company could face a more serious problem.
The scale of the spending plan makes execution crucial. Nebius forecasts 2027 revenue of between $12 billion and $13 billion and said it expects to reach pre-tax break-even in the fourth quarter of that year.
For the third quarter, revenue reached $981 million, an increase of 571% from the same period a year earlier. However, roughly one-third of the reported figure came from a one-time payment associated with a new partnership model, making the underlying recurring revenue trajectory important to assess.
Nebius also reduced its 2026 revenue forecast by $200 million to $3 billion, citing delays at third-party facilities, including the New Jersey project.
The revised outlook and concerns over infrastructure delivery weighed on investor sentiment. Nebius shares fell 17% on Thursday.
The company’s longer-term ambition remains tied to the rapid growth in demand for AI computing, but its latest results expose the difference between securing large customer contracts and delivering operational capacity. Its $40 billion to $45 billion investment plan will require substantial construction, power infrastructure, and financing commitments.