Nebius Group shares extended earlier losses in Monday premarket trading, falling 3.1% to $153.87 as CEO Arkady Volozh acknowledged tighter financing conditions for AI infrastructure providers. Volozh's concerns echoed Elon Musk's warnings about neocloud companies expanding through debt financing.
Volozh spoke Thursday at Nvidia's GTC Berlin conference in an interview with Deirdre Bosa, a former CNBC anchor who hosts Deirdre Bosa Live. Volozh said some capital sources, including asset-backed financing and debt markets, had probably become temporarily unavailable since last week. However, Volozh expressed confidence in Nebius' finances and described obtaining capital as a manageable task rather than a problem. Volozh emphasized Nebius' conservative financial approach and described the balance sheet as healthy. Volozh said customer advances and alternative financing instruments would probably supply enough funding to build at least one gigawatt of capacity.
Nebius announced Thursday that the company had secured a $3.5 billion financing facility from Citi for data center construction and graphics processor purchases. The loan has a 364-day term and initially charges the Secured Overnight Financing Rate plus 2.75 percentage points. Nebius also pointed to long-term customer commitments exceeding $40 billion.
Volozh's comments came before Musk's warning on Sunday that debt markets had almost completely stopped providing money to companies lacking substantial revenue independent of AI data centers. Musk predicted widespread failures and consolidation among neocloud companies. Musk contrasted those funding difficulties with SpaceX's reported $40 billion debt financing for Nvidia processors. The SpaceX CEO's warning followed earlier concerns about neocloud financing risks, despite strong demand for AI computing capacity.
Reuters reported that investors betting against five neocloud and data center companies amassed approximately $6 billion in unrealized profits during October. Reuters put the unrealized profits from bets against Nebius at $2.94 billion. The growing pressure follows earlier warnings of potential industry consolidation and failures, as accelerating AI demand coincides with increasingly difficult financing conditions.
Nebius CEO Echoes Musk on Neocloud Financing Risks, Shares Drop 3.1%
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Summary
Nebius shares dropped 3.1% to $153.87 in pre-market trading after CEO Arkady Volozh warned of tighter financing for AI infrastructure. Volozh cited concerns similar to Elon Musk, noting some debt sources are now unavailable. On-chain analysis shows investor sentiment shifting amid the warning. Despite this, Nebius secured a $3.5 billion facility from Citi for data centers and GPU purchases. Musk has warned that debt markets are pulling back from neocloud firms without proven revenue. On-chain data reflects increased scrutiny of AI sector funding models.
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