I thought it was a very strong presentation from Arkady and Boroditsky with significant new information. This followed their release of their new Data Center to be built in Independence, Missouri. This caught me eye in particular….
“We are seeing strong demand, including upfront payments of 100%, in some cases…”
It appears to me that they are looking to be competing with the main hyperscalers and not just to be a neo-cloud. This caught me eye too…
"…we are now driving sale of future capacity at an increasing rate. We’re also delivering longer contract terms. As a matter of fact, the last quarter, we shared that quarter-on-quarter, the number of year-long contracts doubled. We also saw a 50% expansion in ASP, and we saw prices go up even on older generation GPUs.
Now we’re also – and we haven’t shared this yet, but we’ve added it to our set of priorities, we’re now securing upfront payment from customers, up to and including, in some cases, customers paying 100% upfront."
These are not just upfront payments from Microsoft and Meta, but from enterprises too. They are using their large contracts to build out their own Data Centres.
I was hugely impressed with this call. Nebius SP responded very well too, up 13% yesterday.
Full report can be read here….
https://seekingalpha.com/article/4878385-nebius-group-n-v-nbis-presents-at-morgan-stanley-technology-media-and-telecom-conference-2026?source=copy_to_clipboard
Jonathan
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There is an interesting quote about why hyperscalers are outsourcing as well:
…They need to grow faster than they can, and they outsource this growth to companies like ours and many others. We used to be on their side before. We understand how they’re thinking.
Eventually, in several years, they will be building their own capacity. They just cannot cope with the speed now. That’s why they’re outsourcing. We treat this business for us as temporary. We’re just helping them to grow now. Why? Because for us, we need to grow our part. To grow our part is hugely capital intense. We need tens of billions of dollars to build it. Where we get it, one of the source, in those contracts. The contracts themselves bring us revenues. There’s many other terms in the contracts which help us to finance our main part. Today, I would say it’s only roughly half and half. Half of our capacity is serving these huge customers. They buy just basic services, bare metal. They have their own stack.
They don’t need our services higher than just bare metal. We serve them. We’re happy to have them. I hope we’re a good outsourcer for them, we use their resources, cash, credit ratings, and other things, which we utilize to build our own. This is our main focus, to build our own capacity, which goes to multi-tenancy, to the rest of the market, to all these AI startups becoming corporations as they grow. All the enterprise market going into AI and building into AI into their processes. This is our main market, we’re building for them. Today, yes, we’re serving these big clients. There’s a great contracts, profitable, allow us to finance very good clients, don’t get distracted. Our main businesses in the second part. That part further down will be larger and larger.
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