Key Highlights
- Nebius finalized a $4.34 billion convertible note offering structured in two tranches maturing in 2031 and 2033
- The financing follows a $27 billion capacity agreement with Meta and a $2 billion equity warrant transaction with Nvidia
- Customer prepayments from Meta and Microsoft will finance 60% of expansion activities
- Equity and debt instruments will cover the remaining 40% of growth capital needs
- Capital expenditure projections for 2026 range between $16 billion and $20 billion
Nebius Group (NBIS) has successfully completed a $4.34 billion convertible debt financing, securing substantial capital for its aggressive AI infrastructure expansion strategy.
The financing consisted of two separate note issuances. Nebius placed $2.58 billion in 1.250% convertible notes maturing in 2031—which included an additional $337.5 million in overallotment exercised by investors—along with $1.75 billion in 2.625% notes maturing in 2033. Investors hold an option to purchase an additional $262.5 million of the 2033-dated securities.
Tom Blackwell, Chief Communications Officer, noted that investor appetite drove the upsized offering. “We’ve managed to achieve a large amount of funding while really minimizing the dilution,” he said.
The transaction comes during an active period for Nebius. Earlier in March, the company completed a $2 billion share warrant sale to Nvidia at an exercise price of $94.94 per share. The firm also finalized an agreement potentially worth $27 billion to provide data center capacity to Meta. This builds on a $17.3 billion supply arrangement with Microsoft established in September.
Nebius shares ended Friday trading at $117.62, while the convertible notes carry a conversion price approximately 90% higher than that closing level.
Capital Allocation Strategy
The company intends to source 60% of expansion funding through customer advance payments—mainly from Microsoft and Meta—while utilizing equity and debt markets for the remaining 40%. Blackwell indicated openness to additional large-scale supply agreements if terms align favorably. “They can be a very efficient source of capital,” he said.
Nebius has established capital spending guidance of $16 billion to $20 billion for 2026. According to Blackwell, the company now possesses sufficient resources to execute that roadmap.
He addressed questions about expansion pace. “As long as enterprise AI adoption does continue to increase… the need for what we’re doing is going to make sense,” he said.
Cloud Services Revenue Model
Beyond physical infrastructure development, Nebius views AI cloud services as a strategic revenue opportunity. The approach involves adding software service layers atop its data center footprint—creating recurring income streams that extend beyond current infrastructure buildout cycles.
Blackwell emphasized that major contract awards demonstrate the company’s technical execution capabilities alongside its financial strength.
Nebius revealed that both the Meta capacity agreement and the Nvidia warrant transaction occurred within the past month, highlighting the accelerated pace of its partnership development.
The company has opted against releasing granular details on capital deployment from the convertible proceeds, though stated intentions focus on supporting ongoing data center expansion initiatives.
Monday marked the official close of the financing round, concluding a sequence of capital market transactions that have elevated the company’s standing within AI infrastructure investment communities.
The 2033-dated convertible notes carry a coupon rate of 2.63%, while the 2031 securities feature a 1.250% interest rate.
