AI cloud demand is turning Nebius into one of the fastest-growing names in the neocloud market. The company delivered a huge jump in sales in the second quarter as businesses continued spending heavily on computing power needed to train and run AI models.
AI cloud revenue jumps 514%
Nebius Group reported $575 million in AI cloud revenue for the second quarter, marking a 514% increase from the same period a year earlier.
Total revenue reached more than $582 million, beating the $557 million analysts had expected.
The numbers underline just how quickly demand for AI infrastructure is expanding. Companies building and deploying AI systems need enormous amounts of computing power, and providers like Nebius are stepping in to supply that capacity.
For Nebius CEO Arkady Volozh, the results showed the company was delivering on its plans.
“Everything we set out to do this quarter, we did. In most cases, we did more.”
That momentum was also visible in new business. The value of contracts secured during the quarter quadrupled from the previous quarter, with four agreements averaging more than $1 billion each.
Investors are paying attention
The market reaction was immediate.
Nebius shares climbed as much as 20% to $231.95 after trading opened in New York. The stock had already gained 131% this year through Tuesday’s close, making it one of the more closely watched names in the AI infrastructure space.
The rally reflects a bigger market belief: AI spending is no longer just about model developers and chipmakers. The companies providing the infrastructure underneath the AI boom are becoming major beneficiaries too.
The neocloud race is heating up
Nebius operates in the growing neocloud market, where companies lease out specialized computing capacity from data centers to customers that need it for demanding workloads.
This model has become increasingly important as AI workloads require huge numbers of GPUs and other specialized hardware.
Nebius emerged from Russian internet company Yandex in 2024 and has since built partnerships across the AI infrastructure ecosystem. Its relationships include Nvidia, as well as major data center operators such as Microsoft and Meta.
It is not alone in chasing this opportunity.
CoreWeave, another major neocloud provider, recently raised its sales outlook after seeing continued strength in AI-related spending. The two companies are part of a broader infrastructure race fueled by companies trying to secure enough computing capacity for increasingly demanding AI applications.
AI infrastructure comes with a massive price tag
There is a catch to all this growth: building AI infrastructure is extremely expensive.
Nebius spent roughly $5.7 billion during the second quarter on chips, equipment and data center expansion.
That spending shows the scale of investment required to keep pace with customers. AI cloud providers cannot simply add software capacity when demand rises. They need GPUs, servers, networking equipment, electricity and physical data center space.
Nebius also secured $775 million in asset-backed financing in July, including financing backed by GPUs.
The strategy is clear: spend aggressively today to build the capacity that customers will need tomorrow.
What this means for the AI market
Nebius’ results offer another sign that the AI boom is moving deeper into the infrastructure layer.
The biggest beneficiaries may not only be the companies creating AI models. There is a growing ecosystem behind them, including GPU makers, data center operators, cloud providers, power suppliers and neocloud companies.
For investors, that creates a different way to look at the AI trade.
The question is no longer simply who will build the most powerful AI model. It is also who will provide the computing power needed to run the AI economy at scale?
Nebius is betting heavily that the answer will include companies like itself.
The bigger bet
The numbers from this quarter are impressive, but they also highlight the size of the bet Nebius is making.
Revenue is growing rapidly. Contracts are getting bigger. But capital requirements are enormous.
The company is spending billions to secure chips and expand data center capacity while using financing to support that expansion.
If AI demand continues accelerating, that infrastructure could become a major competitive advantage. If demand slows, the heavy investment required to build that capacity becomes a much bigger risk.
For now, though, the momentum is firmly on the side of AI infrastructure.
Nebius’ 514% jump in AI cloud sales is another reminder that the AI boom is becoming an infrastructure race, and the companies supplying the computing power are increasingly becoming part of the story.