Nebius, the AI cloud company led by Yandex co-founder Arkady Volozh, is borrowing against its own stock to build data centers it says it cannot build fast enough.
The company said on Aug. 19 that it plans to issue two tranches of convertible bonds: $2.75 billion due in 2030 and $1.75 billion due in 2034, for a combined $4.5 billion. Proceeds will fund corporate development, including construction of data centers and expansion of its AI cloud services. Convertible notes, which lenders can exchange for shares if the stock rises above a set price, let fast-growing companies raise money without immediately diluting existing holders.
Nebius is one of the more unusual stories in the AI infrastructure boom. The company emerged from the wreckage of Yandex, the Russian internet giant, whose international operations were separated and relisted on Nasdaq after a complex restructuring tied to Russia’s invasion of Ukraine. Volozh, who stepped back from Yandex’s Russian business, returned to lead Nebius as it pivoted entirely to building computing infrastructure for AI companies.
The pivot has been aggressive. Nebius operates GPU clusters across Europe and the United States, renting capacity to AI labs that need computing to train and run large models. Its flagship facility in Finland, once a Yandex data center, has been expanded into one of Europe’s largest AI computing sites. The company’s pitch to customers is straightforward: it offers the same Nvidia accelerators as hyperscale clouds, with the flexibility and service level of a dedicated infrastructure partner.
Demand for AI computing has overwhelmed supply, and Nebius has said repeatedly that its growth is constrained by how quickly it can build, not how many customers it can find. The company’s backlog of committed GPU capacity has stretched far into the future, and its revenue has climbed sharply as clusters came online. The bond sale is a response to that constraint: the money goes into concrete, power and networking gear, the physical assets behind the AI build-out.
The financing choice says something about the market’s mood. Convertible bonds have become a favored instrument for AI infrastructure companies, whose shares have rallied even as their capital needs balloon. By selling converts, Nebius can borrow at a lower interest rate than straight debt would command, because investors accept the coupon in exchange for the option on future stock gains. If Nebius shares rise, holders convert and the company’s debt load shrinks; if the stock falls, it repays in cash.
Analysts said the two-tranche structure spreads the refinancing risk. The 2030 notes give the company breathing room to build and prove its business model; the 2034 tranche extends the maturity wall well beyond the current AI investment cycle. The total, at $4.5 billion, is among the larger convertibles issued by an AI infrastructure company this year, a sign that investors remain willing to fund the sector’s expansion despite concerns about overbuilding.
The company’s cost structure makes the bet clear. Nebius competes with hyperscale clouds, CoreWeave and other GPU cloud providers, all of whom are spending heavily to secure chips and power. The winners in that race, analysts said, will be the operators who can build the most capacity at the lowest cost per unit of computing. Cheap capital, in the form of converts, is one of the tools that determines the outcome.
Risks are visible. The AI cloud market is crowded, and the price of GPU rental has fallen as capacity has come online, squeezing margins across the industry. If demand softens or chip supply catches up with appetite, the revenue projections behind Nebius’s expansion could come up short, and the company would carry the bond payments regardless. The conversion price will be set when the notes are priced, and investors will scrutinize it for signs of how management views the stock.
For Volozh, the sale is the latest step in a second act. The founder, once one of Russia’s most prominent technology executives, has rebuilt his reputation around an AI infrastructure company with no ties to his former employer’s Russian operations. Nebius’s American listing gives Western investors a liquid way to bet on European AI computing, and the company has said it plans to open additional facilities in the United States.
The bond sale also reflects a broader pattern in AI finance: the sector’s biggest spenders are borrowing against their own momentum. Nvidia, Microsoft and the hyperscalers have all leaned on debt or equity-linked instruments to fund data center expansion. Nebius’s converts, analysts said, are the same logic applied to a smaller balance sheet, a bet that the company’s shares will be worth more in 2030 than the market prices them today.
The sale also carries a message about the convert market’s appetite for AI stories. Issuers from Nvidia suppliers to data center developers have tapped convertible notes this year, and investors have shown they will accept modest coupons when the equity option is juicy enough. Nebius shares have roughly tripled since its relisting, giving bondholders a conversion candidate with momentum. The company’s existing shareholders, including Nvidia, have backed its expansion through separate investments, and the fresh capital diversifies its funding base away from equity alone. For a business whose value depends on completing construction projects on schedule, the predictable cash from a bond sale can be more useful than the higher cost of issuing stock. Analysts noted that the company’s choice of a 2030 and 2034 maturity split also hedges against interest-rate moves, locking in funding for the two most capital-intensive years of its build-out while leaving refinancing optionality open for a later window.
