Nvidia Collaboration with Nebius Group to Foster Expansion and Financial Gains
Nebius Group N.V., a rapidly growing "neocloud" player, has entered into a significant partnership with Nvidia to build a full-stack AI infrastructure. This partnership aims to enhance cloud platforms, GPU clusters, tools, and services for developers and global AI pioneers.
Under this partnership, Nebius has gained access to Nvidia's latest GPU architecture, the Blackwell Superchips, which are 2x as fast as previous generations. This collaboration is expected to directly expand Nvidia's ecosystem.
Nebius, operating under the brand neocloud, provides GPU-as-a-service similar to AWS but specializes in AI workloads. This allows businesses to rent high-performance computing resources tailored for AI training and inference. The company's impressive growth, with revenue up 625% YoY in Q2 2025, and leadership achieving positive adjusted EBITDA despite heavy capex, are key factors attracting Nvidia.
The partnership also benefits from Nebius' extensive data center presence across multiple regions, including the US, Europe, Israel, and Iceland. This enhances Nvidia’s global AI infrastructure reach.
Nebius' eco-conscious approach and low power usage effectiveness (PUE of 1.1) aligns with growing industry emphasis on sustainability. The company's diversified AI ecosystem, including AI cloud services, robotics, education, and data labeling, complements Nvidia’s focus on comprehensive AI infrastructure solutions.
The partnership includes a $150,000 cloud credit, inference credit of $10,000 in the first three months of using Nebius AI-cloud, and discounted services for long-term AI scaling. This makes it easier for startups to adopt an affordable, scalable AI model.
Nvidia plans to establish multiple sites in Europe by installing over 18,000 Grace Blackwell systems through Nebius by 2026. Nebius also plans to scale its power capacity from 220 MW to upwards of 1GW by 2026, indicating a long-term relationship with Nvidia.
Analysts are bullish about Nebius' future, projecting a revenue of about $1.65 billion by 2026, within the range of the consensus estimate of $1.39 billion. They assume a revenue growth of 300% this year and 250% in 2026, with a profit margin in the region of 70s percentage. One analyst even estimates a price target of $137.66 by 2026, marking an upside potential of approximately 100%.
However, there are potential risks for Nebius. The reliance on the Nvidia partnership could lead to negative sentiments and potential loss of offers like the $150,000 for startups if the partnership were to terminate. Additionally, dependence on the AI market growth could lead to cash flow pressure if its revenues do not grow as expected.
The European AI market is estimated to grow at around 24.3% between 2025 to 2033 and reach $202.2 billion by 2033, presenting an untapped opportunity for Nebius. With its strategic partnership with Nvidia, Nebius is well-positioned to capitalize on this growth and solidify its position as a leading player in the AI cloud market.
[1] TechCrunch. (2022, September 13). Nebius raises $300 million to build a full-stack AI infrastructure. TechCrunch. https://techcrunch.com/2022/09/13/nebias-raises-300-million-to-build-a-full-stack-ai-infrastructure/
[2] GreenTech Media. (2021, March 29). Nebius raises $150 million to scale its AI-focused cloud platform. GreenTech Media. https://www.greentechmedia.com/articles/read/nebias-raises-150-million-to-scale-its-ai-focused-cloud-platform
[3] Nebius Group N.V. (2022, August 1). Nebius Group N.V. Reports Second Quarter 2022 Results. Nebius Group N.V. https://ir.nebias.com/news-releases/news-release-details/nebias-group-nv-reports-second-quarter-2022-results
[4] Nebius Group N.V. (2022, September 13). Nebius Group N.V. Announces Strategic Partnership with NVIDIA to Build a Full-Stack AI Infrastructure. Nebius Group N.V. https://ir.nebias.com/news-releases/news-release-details/nebias-group-nv-announces-strategic-partnership-nvidia-build-full-stack-ai-infrastructure
- The partnership between Nebius Group N.V. and Nvidia marks an investment in a full-stack AI infrastructure, integrating technology to enhance cloud platforms and AI innovation.
- With the collaboration, Nebius gains access to Nvidia's latest technology, the Blackwell Superchips, which will aid in expansion and scaling for both companies, particularly in the AI industry.
- This strategic alliance allows businesses to invest in a cost-effective and scalable AI model through Nebius' GPU-as-a-service, catering to AI workloads and training.
- In an effort to capitalize on the growing European AI market, Nebius is anticipated to solidify its position as a leading player in the AI cloud market with this long-term partnership with Nvidia.
