Nebius plans $40 billion in 2027 spending as Microsoft-linked New Jersey project runs late
AI cloud company Nebius said on Thursday it plans $40–45 billion in capital spending for 2027, to be funded largely by customer prepayments and contract-backed loans. A delayed Microsoft-contracted data center in New Jersey and a 17% share price drop highlight the risks.
Nebius, a so-called neocloud company that rents out computing capacity for artificial intelligence, announced on Thursday during its third-quarter earnings call that it plans to spend $40 billion in 2027. That is well above what Wall Street analysts had expected. Its shares closed the day down 17%.
How the buildout would be funded
Nebius intends to pay for construction using customer prepayments and loans secured by customer contracts. CFO Maria Del Dado Alonso Sanchez named the contracts with Microsoft and Meta as ones that can be financed this way. Together, prepayments and asset-backed financing of investment-grade contracts are expected to cover up to 85% of the $40–45 billion in 2027 capital expenditure. The company ended the quarter with $7.4 billion in cash.
The approach carries risk if projects are delayed or canceled. CEO Arkady Volozh acknowledged that building at this scale is hard and that delays are part of the industry right now.
Delays in New Jersey
Microsoft is one of Nebius's largest customers, with a contract worth up to $19.4 billion. It covers capacity at a data center in Vineland, New Jersey, which is months behind schedule. Only just over half of the capacity is now due by the end of the year, with the remainder expected in the second quarter of 2027. Nebius blames DataOne, the site's third-party operator, which wound down temporary power generation faster than expected as it moves to Bloom Energy fuel cells.
In August, the investigative outlet Floodlight found at least 45 natural gas generators operating at the site without permits. New Jersey regulators fined DataOne $1.1 million. Nearby residents have also filed a noise-complaint lawsuit.
Under the contract, Microsoft can terminate affected service after a grace period if deadlines are missed and no alternative capacity is offered, and financial penalties apply for late delivery. Bloomberg reported that Microsoft is tightening oversight of projects run by third parties and weighing whether to sign new agreements.
Outlook
Nebius reported third-quarter revenue of $981 million, up 571% year on year. It cut its 2026 revenue forecast by $200 million to $3 billion, citing third-party site delays, and forecast 2027 revenue of $12–13 billion.
