Nebius Moves Deeper Into AI Software as Margins and Revenue Surge

Nebius acquires Clarifai research team for inference tech, forms Token Factory to cut token costs; Q1 revenue $399M, $6.3B funding raised, power capacity 3.5 GW.

The Amsterdam-based Neocloud provider is no longer content with merely renting out high-end graphics processors. By bringing the core research team from Clarifai on board on May 12, Nebius is integrating inference software and orchestration patents that push it up the value stack. Clarifai founder Matthew Zeiler joins as Senior Vice President Research, focusing on multimodal agentic reasoning, world models, token efficiency and long-term memory — and the deal hands Nebius a non-exclusive, perpetual license to Clarifai’s modern inference and reasoning technology.

That move builds on last year’s $643 million acquisition of Eigen AI, which optimizes models. Together with the earlier Tavily purchase, Nebius is weaving all three into a “Token Factory” — a platform designed to cut the cost-per-generated token. The vision is to capture the higher-margin part of AI that hyperscale cloud giants currently own, rather than just selling raw GPU cycles.

The strategic push arrives on the back of a blockbuster quarter. Revenue between January and March hit $399 million, roughly eight times the year-ago figure. Adjusted EBITDA reached $129.5 million, translating into a margin of 45 percent — nearly double the 24 percent posted in the previous quarter and well ahead of analyst expectations. Wall Street had penciled in $375 million in revenue and an adjusted net loss of $174 million; the actual adjusted net loss came in at $100 million. On a GAAP basis, however, Nebius booked a net profit of $621 million, driven by a multibillion-dollar revaluation of equity investments.

To keep the growth engine fuelled, the company raised a hefty $6.3 billion in the quarter. Nvidia chipped in $2 billion as an equity investment, while convertible notes contributed $4.3 billion. At quarter-end, cash and equivalents stood at $9.3 billion, giving management ample short-term liquidity to execute its aggressive infrastructure build-out.

Capacity is becoming the defining constraint. Nebius has already secured power capacity of more than 3.5 gigawatts under contract, including 1.2 gigawatts from a newly acquired site in Pennsylvania. In Missouri, construction has begun on a large AI-fab campus covering roughly 400 acres, expected to create over 1,000 construction jobs and roughly 100 permanent roles. The company has raised its year-end 2026 power capacity target to more than 4 gigawatts.

On the commercial front, IT distributor TD SYNNEX is now reserving exclusive capacity on the Nebius cloud, giving enterprise customers direct access to powerful Nvidia clusters. That partnership opens a fresh distribution channel into the mainstream corporate market, where Nebius expects stiff competition for every new graphics processor.

Wall Street is weighing the opportunity against the execution risks. Bank of America reaffirmed its buy recommendation and lifted its price target to $205 from $175 on May 11. Wolfe Research started coverage with a “Peer Perform” rating, citing strong secured demand from Microsoft and Meta but flagging substantial execution and financing risks; its fair-value range spans $80 to $170. The stock has already climbed roughly 134 percent since the start of the year, leaving the company valued at more than $52 billion — about 16 times expected forward sales.

Nebius’s own outlook points to continued scaling. Full-year 2026 revenue is guided at up to $3.4 billion, with an adjusted EBITDA margin of around 40 percent. A temporary dip in margins is expected in the second quarter as new server capacity comes online. The capital required to fund the expansion is immense: capex for 2026 is now forecast at $20 billion to $25 billion. As long as multiple customers continue to compete for each new GPU, management remains confident the growth story has room to run.