Nebius raises $4.5 billion in convertible notes for AI cloud buildout

Nebius Group, the Amsterdam-based AI cloud company, plans to raise $4.5 billion in convertible senior notes to fund data center construction and GPU procurement, deepening its push into an AI infrastructure market where hyperscalers and Nvidia-backed rivals are spending heavily.

The company will offer the notes in two series through a private placement to qualified institutional buyers under Rule 144A, according to a press release. The offering comprises $2.75 billion in notes due 2030 and $1.75 billion in notes due 2034, with initial purchasers granted an option to buy an additional $375 million of 2030 notes and $300 million of 2034 notes within 13 days of issuance.

Nebius said it will use the proceeds to finance data center construction and build-out, investments in its full-stack AI cloud platform, expansion of its data center footprint, and procurement of key components including GPUs. The notes will be senior, unsecured obligations issued under indentures with U.S. Bank Trust Company as trustee, bearing interest payable semi-annually. Noteholders may convert under certain circumstances, with the company settling conversions in cash, Class A ordinary shares, or a combination.

Shares fell 7.6 percent to $248.43 on Monday and slipped another 6.3 percent in pre-market trading Tuesday, as investors weighed potential dilution from the convertible offering. The company also expects to enter privately negotiated exchange agreements with holders of its existing 2.00 percent convertible notes due 2029 and 3.00 percent notes due 2031, swapping a portion for Class A shares — a move that could add further supply pressure.

The capital intensity of the AI cloud race

The offering ranks among the largest debt raises by an independent AI cloud provider, a measure of the capital required to build GPU clusters at scale. Nebius, which traces its roots to Russian internet company Yandex, competes with CoreWeave and hyperscalers including Microsoft, Amazon, and Google for access to Nvidia's latest accelerators and data center capacity.

Demand for AI compute continues to outstrip supply, with Nvidia's data center revenue and the broader infrastructure buildout driving record capital expenditure across the sector. Nebius's ability to secure long-term financing at scale suggests sustained demand for its cloud services, even as higher interest rates raise the cost of debt-funded expansion.

For investors, the convertible structure carries a trade-off: the notes offer cheaper financing than issuing equity, but conversion rights could dilute existing shareholders if the stock appreciates. The 2030 notes cannot be redeemed before February 21, 2028, and the 2034 notes before August 21, 2028, giving the company a defined window to deploy capital before any redemption pressure. Redemption is permitted after those dates only if the notes are freely tradable and the Class A share price exceeds 130 percent of the conversion price, or 150 percent for 2034 notes redeemed between August 21, 2028 and August 21, 2029.

The offering is not contingent on completing the exchange transactions, and there can be no assurance any such deals will close, the company said. Interest rates, conversion rates, and accretion schedules will be determined at pricing.

This article is for informational purposes only and does not constitute investment advice.