To The Moon

Introduction

$NEBIUS(NBIS)$  , launched in July 2024, represents a pivotal shift in the career of Arkady Volozh, the co-founder of Yandex, once dubbed “Russia’s Google.” Emerging from the ashes of Yandex’s Dutch holding company after its $5.2 billion divestment of Russian assets, Nebius is an Amsterdam-based AI infrastructure provider aiming to become a cornerstone of Europe’s artificial intelligence ecosystem. This paper explores Nebius’s origins, Volozh’s evolving relationship with Vladimir Putin, the state of Russia’s data centers following the Ukraine conflict, Nebius’s revenue trajectory, and the broader context of Europe’s AI data center surge.

Nebius Group: Foundations and Ambitions

Nebius emerged after Yandex N.V. sold its Russian operations in 2024, retaining international assets like a Finnish data center, AI-focused engineers, and ventures in autonomous driving (Avride), data labeling (Toloka), and edtech (TripleTen). Headquartered in Amsterdam, Nebius targets AI startups and enterprises needing scalable GPU clusters and cloud platforms—sectors dominated by U.S. hyperscalers like AWS and Azure. With over 1,000 engineers, many ex-Yandex talents who fled Russia post-2022, Nebius leverages Volozh’s expertise in building large-scale tech infrastructure. Its Finnish facility in Mäntsälä, boasting a 46.54-petaflop supercomputer, is set to triple capacity by late 2025, while plans for new European data centers aim for tens of thousands of GPUs. Backed by $2.5 billion in cash from the Yandex sale and a $700 million raise from investors like Nvidia in December 2024, Nebius projects $200 million in annual recurring revenue (ARR) by mid-2025.

Volozh and Putin: From Collaboration to Confrontation

Arkady Volozh’s relationship with Vladimir Putin mirrors the arc of many Russian tech magnates—initial alignment followed by tension as state control tightened. In 2017, Putin visited Yandex’s Moscow headquarters, where Volozh showcased innovations like self-driving cars, earning praise as a symbol of Russian ingenuity. Yet, underlying frictions emerged earlier; in 2014, Putin criticized Yandex’s Western roots, reflecting Kremlin unease with its independence. Volozh relocated to Israel that year, distancing himself physically but not operationally from Russia. The Ukraine invasion in February 2022 marked a breaking point. EU sanctions hit Volozh in June 2022, citing Yandex’s alleged role in Kremlin propaganda, prompting his resignation as CEO. His public condemnation of the “barbaric” war in August 2023—a rare move among Russian elites—drew a veiled retort from Putin in September 2023, wishing him “good health” in Israel, a comment Volozh found chilling. By 2024, with sanctions lifted and Yandex’s Russian arm sold, Volozh severed ties with Russia, branding Nebius a “Western company.” This trajectory suggests a pragmatic pivot rather than a moral epiphany, driven by survival and opportunity amid geopolitical upheaval.

Russia’s Data Centers Post-Ukraine War

The Ukraine-Russia conflict, ongoing as of February 26, 2025, has reshaped Russia’s data center landscape, though a definitive “post-war” state remains speculative. Pre-2022, Yandex operated five facilities, including a 63MW site in Kaluga Oblast, serving its cloud and search empire. Sanctions and Western tech exodus—halting access to chips from Nvidia and software from Oracle—forced reliance on domestic or Chinese alternatives, which lag in performance. The war accelerated state oversight; Yandex’s Russian assets, now under a consortium including Lukoil-linked funds, reflect Kremlin efforts to domesticate tech. Data center growth persists, with firms like Rostelecom expanding capacity for state-driven AI and surveillance, but talent flight (over 100,000 IT workers left by 2023) and power constraints hinder progress. Post-war, assuming a resolution, Russia might rebuild its data center sector with Chinese partnerships, but global competitiveness seems doubtful without Western integration—a stark contrast to Nebius’s European trajectory.

Nebius Revenue Growth: Projections and Challenges

Nebius’s revenue outlook is ambitious yet nascent. Starting debt-free with $2.5 billion in cash, it targets $200 million ARR by Q3 2025, driven by AI infrastructure demand. Its November 2024 data center expansions and December funding round signal rapid scaling, with plans for $1 billion in European investments by mid-2025. Partnerships with Nvidia ensure GPU access, a competitive edge in a supply-constrained market. However, execution risks loom—building high-density data centers is capital-intensive, and competition from CoreWeave and hyperscalers could squeeze margins. Macro factors, like Europe’s energy costs or a potential AI hype slowdown, add uncertainty. Still, Nebius’s lean structure and Volozh’s track record suggest it could hit its targets. Breaking it down to the most recent quarter, Q4 2024 (ending December 31, 2024), revenue hit $37.9 million, up 466% from $6.7 million in Q4 2023. The core AI infrastructure segment was the star, growing 602% year-over-year in that quarter alone, contributing over half of the total revenue. This growth reflects their expansion of data centers—like the new GPU cluster in Kansas City—and partnerships, such as with Nvidia, which bolstered their capacity with H200 GPUs.

Europe’s AI Data Centers: A Booming Context

Europe’s AI data center surge provides Nebius’s backdrop. By 2030, capacity could soar from 10 GW to 35 GW, fueled by AI’s computational demands. Major projects—like France’s 1 GW UAE-backed center and Blackstone’s £10 billion UK facility—underscore the trend. The EU’s EuroHPC initiative, with seven AI Factories planned for 2025-2026, aims to bolster sovereignty, while firms like CoreWeave invest $2.2 billion across Nordic and Southern Europe. Power shortages, regulatory hurdles, and chip supply chains challenge growth, yet Europe’s renewable energy push and talent pool offer advantages. Nebius fits this ecosystem as a mid-tier player, focusing on AI-native clients rather than competing directly with hyperscalers, positioning it as a niche enabler in a crowded field.

Conclusion

Nebius Group embodies Arkady Volozh’s reinvention, distancing himself from Putin’s Russia to chase Europe’s AI frontier. Its revenue potential hinges on executing a bold infrastructure vision, while Russia’s data centers, stifled by war and isolation, lag behind. Europe’s data center boom offers Nebius a fertile ground, though success depends on navigating technical and market risks. Volozh’s journey—from Putin’s ally to exile—reflects broader tensions between tech innovation and autocratic control, with Nebius as a test of whether talent and capital can transcend geopolitical divides.

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