Nebius plans $40 billion in 2027 spending as project delays raise concerns
Neocloud company Nebius announced $40–45 billion in planned 2027 capital spending in its third-quarter results, well above Wall Street expectations. A New Jersey data center for its major Microsoft contract is delayed, and shares fell 17% on the day.
Nebius, a company that rents out AI computing capacity, said on its third-quarter earnings call Thursday that it plans to spend $40 billion to $45 billion on data center buildout in 2027. That is far more than Wall Street had anticipated. Firms like Nebius are called “neoclouds”: newer cloud providers specializing in AI computing power. The company's shares ended the day down 17%.
Financing through customer prepayments
Nebius intends to fund the spending with customer prepayments and loans backed by customer contracts. Prepayments plus asset-backed financing of investment-grade contracts are expected to cover up to 85% of the 2027 outlay. The company ended the quarter with $7.4 billion in cash. CFO Maria Del Dado Alonso Sanchez named the Microsoft and Meta contracts as ones that can be financed this way.
Delays in New Jersey
Microsoft is one of Nebius's largest customers, with a contract worth up to $19.4 billion. The data center in Vineland, New Jersey, is months behind schedule. Only just over half of the capacity is planned for delivery by year-end, with the rest in the second quarter of 2027. The site's operator, DataOne, wound down temporary power generation faster than expected as it switches to Bloom Energy fuel cells. In August, the investigative site Floodlight found at least 45 natural gas generators operating there without permits, and New Jersey regulators fined DataOne $1.1 million.
According to Nebius's summary of the contract, Microsoft can terminate the affected service after a grace period if dates are missed and no alternative capacity is offered, and late delivery carries financial penalties. Nebius did not say whether Microsoft has accepted the new dates; Microsoft has not publicly canceled anything. Bloomberg reported that Microsoft is tightening oversight of third-party projects and weighing whether to sign new agreements.
Forecasts
Nebius forecasts 2027 revenue of $12 billion to $13 billion and expects to break even on a pre-tax basis by the fourth quarter. Third-quarter revenue was $981 million, up 571% year over year. The 2026 revenue forecast was cut by $200 million to $3 billion.
