The Dutch AI cloud infrastructure provider Nebius (NBIS) announced on Monday a major investment of approximately £1.7 billion to expand its capacity in the United Kingdom. The plan includes establishing three new sites for deploying NVIDIA (NVDA) infrastructure and further scaling its London-based commercial and AI research and development center. This news provided a lift to the companies' shares, with Nebius rising around 1% and NVIDIA gaining about 2% in early Monday trading.
This represents the largest single expansion commitment Nebius has made in the European market since it spun off from the Russian internet giant Yandex and went public independently in 2024. Following its initial deployment of NVIDIA's Blackwell Ultra infrastructure in the UK in November 2025, the three new sites will be equipped with NVIDIA's latest full-stack, end-to-end AI factory platform technology. Upon full operational capacity by 2027, the total power capacity is projected to reach 65 megawatts.
Strategic Alignment with UK Government Policy
Nebius highlighted that this UK expansion aligns with the government's "AI Opportunity Action Plan," aiming to boost domestic computing power. This enhancement is intended to enable UK businesses, research institutions, and public services to build and deploy AI applications at scale. Additionally, Nebius has signed a capacity lease agreement for 22 megawatts with UK data center operator Kao Data. These moves underscore Nebius's strategic intent to rapidly capture a leading position in the global AI computing infrastructure arena through a capital-intensive model.
The timing of Nebius's increased investment in the UK corresponds with clear policy support. The UK government's "AI Opportunity Action Plan," launched in 2025, provides a comprehensive framework covering computing infrastructure, talent development, and sovereign AI capabilities. Over the past year, the UK has established five major AI growth regions, attracting a total investment of £68 billion. Nebius's expansion plan is closely aligned with this initiative. UK AI Minister Kanishka Narayan welcomed the investment, stating the government is "determined to make the UK the best place in the world to build and deploy AI," and emphasized that Nebius's infrastructure will provide businesses with the necessary resources to train, test, and run advanced systems domestically.
Established Commercial Foundation and Client Base
Nebius's expansion is not merely a capacity push but a strategic reinforcement built upon an existing commercial foundation. London-based fintech giant Revolut has fully migrated its AI architecture to the Nebius platform, utilizing the Nebius Token Factory to power real-time financial crime intelligence agents and handle over a million customer service tickets monthly. Several companies supported by the UK's sovereign AI fund are also developing on the Nebius platform. Prima Mente, a firm dedicated to tackling brain diseases like Alzheimer's and Parkinson's, runs its biological foundation model training and inference services on Nebius. Its founder noted that "Nebius's expansion in the UK means we can run more experiments and iterate faster." For Nebius, this ability to translate capital expenditure into tangible customer use cases is reshaping market valuation logic for this emerging AI cloud provider.
Robust Financial Performance Supporting Growth
Nebius's strategic expansion is backed by solid financial results. For the first quarter of 2026, the company reported impressive figures: group revenue surged 684% year-over-year to $399 million, with core Nebius AI business revenue reaching $390 million, an 841% increase. Group adjusted EBITDA turned positive to $130 million, swinging from a net loss of $54 million in the prior-year period, achieving an adjusted EBITDA margin of 32%. Annualized Recurring Revenue (ARR) reached $1.9 billion, marking over 50% growth from the previous quarter's $1.25 billion.
In terms of client structure, Nebius has successfully built a core customer base comprising global tech giants. Beyond a five-year strategic partnership with Meta Platforms, Inc. (META) valued at $27 billion (including a $12 billion dedicated compute contract and a $15 billion flexible expansion option), Nebius also holds a five-year, $17.4 billion compute agreement with Microsoft (MSFT). These long-term contracts provide stable cash prepayments to support ongoing capacity expansion—operating cash flow for the quarter was a robust $2.3 billion, with cash and equivalents on hand reaching $9.3 billion by quarter-end.
NVIDIA's Strategic Backing and Market Position
Concurrently, strategic backing from NVIDIA provides top-level technical support for Nebius. In March 2026, NVIDIA made a strategic investment of $2 billion in Nebius, acquiring an approximately 8.3% stake. The accompanying technical cooperation agreement grants Nebius priority access to NVIDIA's latest computing platforms. This closed-loop model—NVIDIA investment, Nebius building GPU facilities, and capacity consumption through contracts with firms like Microsoft—represents one of the most aggressive capital operation paradigms in the current AI cloud infrastructure sector.
It is noteworthy that a late-2025 global AI cloud player report by SemiAnalysis ranked Nebius, alongside CoreWeave, Lambda, and Crusoe, among the leaders, surpassing some segments of traditional cloud providers. These emerging players, termed "Neoclouds," are rapidly rising in the global AI computing landscape through a "full-stack self-build and vertical integration" approach. To support this growth, Nebius is actively recruiting engineering and R&D talent in the UK to complement its headquarters team in Amsterdam. Today, applications ranging from Revolut's fraud prevention models and Prima Mente's brain disease research to Meta's AI training workloads are accelerating their operations through Nebius's expanding UK infrastructure.
Comments