Nebius has announced plans to spend between $40 billion and $45 billion on artificial intelligence infrastructure in 2027, despite delays affecting its multibillion-dollar computing agreement with Microsoft. The AI cloud provider disclosed the spending forecast alongside its third-quarter financial results on November 12, 2026, outlining plans to finance expansion through customer prepayments and loans backed by long-term contracts.
According to Nebius’ earnings report, the company generated $980.8 million in third-quarter revenue, an increase of 571% year over year. However, Nebius lowered its 2026 revenue outlook to approximately $3 billion after delays at third-party data centers pushed some computing capacity deliveries into 2027.
Microsoft Data Center Project Faces Delivery Delays
Nebius’ agreement with Microsoft, valued at up to $19.4 billion, has encountered delays at a data center in Vineland, New Jersey. Just over half of the contracted computing capacity is now scheduled for delivery by the end of 2026, with the remainder expected in the second quarter of 2027.
Andrey Korolenko, Nebius’ chief product and infrastructure officer, attributed the delays to third-party operator DataOne’s decision to discontinue temporary power generation earlier than expected while transitioning to Bloom Energy fuel cells. The facility has also faced regulatory scrutiny after New Jersey authorities fined DataOne $1.1 million for operating natural gas generators without the required permits.
Residents have separately filed a lawsuit alleging excessive noise from the facility. Under the Microsoft agreement disclosed to regulators, delayed deliveries may trigger financial penalties or contract termination after a grace period if alternative capacity is unavailable.
Nebius said Microsoft participated in the revised planning process, although it did not confirm whether the customer formally accepted the updated schedule. Microsoft has not publicly announced any cancellation of the agreement.
Customer Prepayments to Fund Expansion
Nebius expects customer prepayments and asset-backed financing to cover approximately 75% to 85% of its planned 2027 capital expenditure. The company anticipates receiving $17 billion to $20 billion in customer prepayments next year, supported by contracts with major customers including Microsoft and Meta.
Chief Revenue Officer Marc Boroditsky said recent contracts include advance payments sufficient to cover the associated infrastructure construction costs. Nebius ended the third quarter with approximately $7.4 billion in cash and cash equivalents.
Nebius Forecasts $13 Billion Revenue in 2027
Nebius projects revenue between $12 billion and $13 billion in 2027 and expects to reach pre-tax breakeven during the fourth quarter. The company also plans to add over one gigawatt of computing capacity annually, primarily through facilities it develops and operates directly.
Meanwhile, Bloomberg reported that Microsoft is increasing oversight of third-party AI infrastructure providers, including Nebius, IREN, and Nscale, following construction and power-related delays. Nebius shares declined approximately 17% on November 12 after the company announced its revised financial outlook and spending plans.
Featured image credits: Nebius
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