Nebius Plans $40 Billion to $45 Billion in 2027 Spending as Microsoft Capacity Slips to Q2

Nebius, the Amsterdam-based AI cloud provider that trades on the Nasdaq as NBIS, laid out a 2027 capital spending plan of $40 billion to $45 billion in its third-quarter shareholder letter on Thursday, Nov. 12. The number landed well above what Wall Street expected.

The same update included a delay on its biggest contract.

The money plan

Nebius now puts 2026 capital spending at roughly $27 billion, up from an earlier range of $20 billion to $25 billion. The 2027 budget is aimed at adding more than 1 gigawatt of capacity.

The company says customers will carry much of the load. It reports $10 billion in prepayments committed in 2026 and projects $17 billion to $20 billion in 2027. In the third quarter, prepayments covered more than 100% of contract-related capital spending, up from 50% to 60% in the second quarter.

Nebius also said prepayments plus asset-backed financing tied to investment-grade contracts could cover up to 85% of projected 2027 spending. It reported $7.4 billion in cash.

On revenue, Nebius posted $981 million for the quarter, up 571% from a year earlier. About a third of that came from a one-time payment tied to a new partnership model. For 2027 it forecast $12 billion to $13 billion in sales and pre-tax breakeven by the fourth quarter.

The company also said new contract value signed since the third quarter has surpassed $12 billion. Its total commitments exceed $40 billion.

The Microsoft problem

The largest piece of that backlog is a Microsoft contract worth up to $19.4 billion, with the low end of the range at $17.4 billion. Against total commitments of more than $40 billion, that is a heavy concentration in a single customer.

The capacity in question sits at a Vineland, New Jersey, data center run by a third-party operator, DataOne. Only just over half of the Microsoft capacity is now planned for delivery by the end of this year. The rest slides to the second quarter of 2027.

The tranches were originally meant to arrive across 2025 and 2026.

Andrey Korolenko, Nebius's chief product and infrastructure officer, said the delay came because DataOne "decided to wind down the temporary generation faster than it was expected" as the site moves to Bloom Energy fuel cells.

The temporary generation has its own history. In August, the investigative site Floodlight identified at least 45 natural gas generators operating at the DataOne site without permits for gas generation. New Jersey regulators fined the facility $1.1 million, finding the generators violated federal law. Nearby residents have also sued over a constant humming noise they say the facility emits.

Under Nebius's summary of the contract, Microsoft can terminate affected service after a grace period if dates are missed and no alternative capacity is offered. The contract also carries financial penalties for late delivery.

Nebius said Microsoft "has been part of the planning process." It did not say whether Microsoft has accepted the new dates. Microsoft has not publicly canceled anything. Reports this week say Microsoft is cooling on neocloud deals that miss their delivery targets.

What Nebius says in its defense

CEO Arkady Volozh did not dodge the issue. "Building at this scale is hard, and delays are part of our industry right now," he said on the call. "We are not immune."

The company argues the slippage is concentrated at externally operated sites, while its own builds are on or ahead of schedule. It cut its 2026 revenue outlook by $200 million to $3 billion because of the third-party delays.

Nvidia CEO Jensen Huang has made a related argument about the sector's financing. Demand for neoclouds is "off the charts," he told CNBC this past week, and the gap is working capital. "The demand of the capital is much greater than the availability of the capital. That's going to get solved," he said.

Elon Musk sees it differently. In an Oct. 25 post on X, he said debt markets have closed to companies without "substantial revenue independent of AI data centers," and predicted the 200-plus neoclouds will see "guppy-level death and consolidation."

A bad day to report

Nebius shares fell roughly 15% to 17% Thursday. They dropped during a rout that took the S&P 500 down 4.36% to 7,353.73 and the Nasdaq down 5.52% to 24,315, with the S&P wiping out a record $2.9 trillion in market value. CoreWeave fell about 10% to 14%, depending on the measure. Nvidia fell about 9%.

The selloff cannot be cleanly pinned on Nebius's report. The same session hit nearly every AI infrastructure name, and the Daily Wire and Breitbart tie the broad drop to investor fears that the Democratic midterm sweep will slow data center construction. Dan Ives warned the buildout will slow sharply through 2028, and UBS estimated about 30% of planned capacity could be affected. Gina Hinojosa, who defeated Texas Gov. Greg Abbott, campaigned on pausing new projects in a state that holds roughly a quarter of planned U.S. data center capacity.

Those are expectations, not enacted policy. Any sweeping federal crackdown would face a likely Trump veto, and some on Wall Street say the bigger risk is governors and local regulators.

Meta, another Nebius customer, said Oct. 26 that it would raise $95 billion through stock offerings, including $35 billion in public offerings and $60 billion in ongoing share sales, to fund AI spending. Its full-year capital expenditures are projected at $135 billion to $145 billion.

What to watch

Nebius's plan assumes customers keep prepaying and lenders keep backing contracts. Both depend on capacity showing up when promised. Whether Microsoft accepts the Q2 2027 date, or uses its termination right, is the open question, and Nebius has not said which way that is leaning.