May 13 — Nebius Group reported a massive increase in first-quarter capital spending on Wednesday, highlighting the company’s aggressive push to expand its artificial intelligence cloud infrastructure business amid surging demand for AI computing power.
The AI infrastructure provider said capital expenditure climbed to approximately $2.5 billion during the quarter, significantly higher than the $544 million reported a year earlier. The figure also exceeded analysts’ expectations of $2.4 billion, according to estimates compiled by LSEG.
The spending surge was largely driven by investments in graphics processing units (GPUs) and data center hardware used to support the company’s rapidly growing AI cloud platform. Nebius has been gaining traction in the competitive AI infrastructure market by offering high-performance computing platforms powered by NVIDIA GPUs to developers and enterprise clients.
Revenue for the three months ended March rose sharply to $399 million, beating Wall Street estimates of $371.4 million. The strong growth reflects rising global demand for AI model training and inference infrastructure.
Despite the robust revenue performance, investors and analysts remain cautious about the company’s heavy spending strategy. Nebius has been rapidly expanding its global data center footprint, a move that could continue to pressure profitability and margins in the near term.
The company previously paused its share buyback program in late 2024 to prioritize funding for AI infrastructure expansion. Analysts say the approach mirrors strategies adopted by other AI cloud players seeking to capitalize on booming demand for generative AI services.
One of Nebius’ closest rivals, CoreWeave, recently projected annual capital expenditures between $30 billion and $35 billion, warning that rapid investment growth may weigh on short-term financial margins.
Nebius has also accelerated its expansion through acquisitions and strategic partnerships. Earlier this month, the company agreed to acquire AI startup Eigen AI for approximately $643 million to strengthen its AI inference platform and expand its presence in the United States.
In another major move, Nebius signed a long-term agreement with Meta to provide up to $27 billion worth of computing capacity over five years, further cementing its position in the rapidly evolving AI infrastructure market.