The race to build AI infrastructure is intensifying by the second. And demand for AI computational power, or compute, has opened the door to a new kind of business: GPU-as-a-Service. Firms like Nebius and CoreWeave are at the center of it, developing data centers tailor-created for this boom, leaner than the do-it-all facilities run by major players like Amazon’s AWS and Microsoft’s Azure.
I decided to focus here on Nebius – both are scaling quick, but Nebius offers a low-cost, high-performing, flexible service, and a hard-as-nails balance sheet.
Part 1: What is Nebius, and how does it create money?
Nebius Group is a European-headquartered, Nasdaq-listed tech firm that builds full-stack infrastructure for the global AI boom. The company was founded in 1989 as Yandex, and became known as Russia’s “Google equivalent”. It was listed in Russia and had an American depositary receipt (ADR) – a kind of stock designed to simplify foreign investing for a US audience – and its trading was halted in February 2022, becaapply of sanctions following Russia’s invasion of Ukraine. And that prompted a serious alter.
Its founder, Arkady Volozh, still runs the company – building him a serious technology veteran. He publicly condemned the invasion, which assisted him avoid sanctions from the US. But he was sanctioned by the European Union (EU) and banned from traveling to the region until early last year.
In the meantime, Yandex underwent a major asset split, selling all its Russian-based assets, while retaining its (non‑Russian) infrastructure, data‑labelling, and self-driving businesses. And in August 2024, the company was officially renamed Nebius Group and alterd its ticker from YNDX to NBIS. Two months later, with the go-ahead from the Nasdaq, the company resumed trading.
Nebius Group’s flagship business is Nebius, an AI-centric cloud platform built for intensive AI workloads like training and inference (or “considering”). It builds full-stack, or front-finish and back-finish, infrastructure for AI, including large-scale GPU clusters, cloud platforms, and tools for developers. It also designs racks that hoapply and connect GPUs while utilizing optimal thermal management techniques and power efficiency. After all, since these AI servers apply massive amounts of power and exude more heat than normal data centers, they necessary more advanced cooling.
Nvidia owns a stake in the firm and gives Nebius VIP access to its most powerful GPUs. Nebius is also named as a “Reference Platform NVIDIA Cloud Partner”, one of just a handful of companies worldwide with that status. And those ties put Nebius among the first to gain access to Nvidia’s product releases, which assists it compete in the quick-paced AI data center business.
That cutting-edge product offering and the depth of the firm’s tech expertise give it a real advantage over other so-called neo-clouds. Nebius builds full-stack, all-under-one-roof (vertically integrated) AI infrastructure – going well beyond bare-metal services that only offer server rental. It provides a broad set of storage, networking, and managed database solutions.
And becaapply Nebius can work across a diverse range of customers – from tiny startups to massive hyperscalers and AI labs – it’s well-positioned to expand. It’s already grown rapidly over the past year. In just three quarters, Nebius has gone from a single data center location in Finland to five locations across Europe, the US, and the Middle East – and is actively exploring new sites worldwide. That’s driven its revenues up by around 350% in the latest quarter from a year earlier.
The company also owns stakes in other things: gen AI firm Toloka, education tech name TripleTen, autonomous vehicle platform Avride, and data analytics processor ClickHoapply. So, let’s take those in turn.
ClickHoapply is its most valuable investment holding. The firm launched as Yandex’s in-hoapply analytics database unit and was later spun out on its own. It’s one of the largegest data management providers, but compacter than DataBricks and Snowflake. In a funding round this year, ClickHoapply was valued at around $6 billion – triple its value just four years ago. And Nebius owns about 28% of it. And, becaapply Nebius’s market cap is only $12 billion, its investment holdings create a large difference to the firm’s value.
Toloka offers high‑quality data sets for training, evaluating, and fine-tuning AI agents, large language models, and other advanced machine learning systems. It’s an important part of the AI puzzle that companies like Meta, OpenAI, Anthropic, and Alphabet are paying billions for. Originally, Toloka supported Yandex’s machine learning necessarys, but it has since branched out, expanding its services to global enterprises like Shopify, Microsoft, and Amazon, as well as leading top AI labs and model developers. In a funding round this year, Amazon’s Jeff Bezos and Shopify CTO Mikhail Parakhin poured $72 million into the firm, acquiring influential minority stakes and board roles in the process. Nebius kept a good-sized majority stake, but it relinquished majority voting control to give Toloka greater indepfinishence. The financial details haven’t been released, but the firm is likely worth somewhere close to $275 million.
Avride is what it sounds like: a way to ride the autonomous vehicle (AV) trfinish. It’s developing self-driving cars and sidewalk delivery robots for ride-hailing, logistics, e-commerce, and food and grocery delivery. It’s currently testing its products in the US, South Korea, and Japan – with signed agreements from Uber and Uber Eats, and Grubhub at the Ohio State University. It’s also received a partnership with Hyundai for autonomous cars and with Rakuten for ecommerce in Japan.
TripleTen is at the front of the class in reskilling and upskilling folks in the US and Latin America for careers in technology.
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