Nebius plans $40B in 2027 spending amid delays
Original: Nebius tests the neocloud playbook with $40 billion in planned spending
Why This Matters
Neocloud financing models face stress-testing as big-tech customers grow less tolerant of slippage.
Nebius announced $40B in planned 2027 capital spending during its Q3 earnings call on Nov. 12, 2026 — far above analyst expectations — while admitting key data center projects, including a $19.4B Microsoft deal, are running months behind schedule.
Nebius, the neocloud infrastructure company led by CEO Arkady Volozh, unveiled a $40 billion spending plan for 2027 during its third-quarter earnings call Thursday — a figure that surprised Wall Street. The company intends to finance this buildout through customer pre-payments and loans backed by customer contracts, using projected data center revenue to fund construction. That model carries real risk when projects slip.
The most prominent example: a New Jersey data center operated by third-party firm DataOne, central to a contract worth up to $19.4 billion with Microsoft. Deliveries originally slated for 2025 and 2026 have slipped, with only about half of the Microsoft capacity now expected by year-end and the rest pushed to Q2 2027. Chief product and infrastructure officer Andrey Korolenko attributed the delay to DataOne winding down temporary power generation faster than anticipated as the site transitions to Bloom Energy fuel cells.
That transition wasn't entirely voluntary. Investigative outlet Floodlight reported in August that DataOne had been running at least 45 unpermitted natural gas generators on-site. New Jersey regulators fined the facility $1.1 million, citing violations of federal law. DataOne also faces a noise-complaint lawsuit from local residents.
Under the Microsoft contract terms, Microsoft can terminate service on affected tranches after a grace period if deadlines are missed and no alternative capacity is offered. Financial penalties for late delivery also apply. Nebius said Microsoft "has been part of the planning process," but stopped short of confirming Microsoft has formally accepted the new dates. Microsoft has not publicly canceled the agreement. Volozh acknowledged the broader challenge plainly: "Building at this scale is hard, and delays are part of our industry right now. We are not immune."