Nebius is charging more for AI computing, but a partner's power problem in New Jersey pushed some of Microsoft's capacity into 2027

Nebius, the Amsterdam-based company that rents out Nvidia chips to AI developers, just showed investors two sides of the AI buildout. Its customers are paying more, and paying sooner, for computing power. But the company still cannot deliver that power on time when it depends on someone else's electricity.

Nebius reported third-quarter revenue of $980.8 million, up 571% from a year earlier and ahead of the roughly $907 million analysts expected. Its shares still fell as much as 18% on Thursday, to near $127, TheStreet reported.

The reason was not demand. It was the cost and timing of meeting it.

A power hand-off went wrong

The biggest setback sits at a New Jersey site that Nebius rents from an outside operator, DataOne, where Microsoft has contracted capacity. The site was running on temporary on-site generators while it waited for permanent power.

DataOne began retiring some of those temporary generators before permanent power was ready, TheStreet reported, and Nebius said this happened faster than planned. That reset the schedule. Nebius now expects the rest of Microsoft's capacity at the site in the second quarter of 2027.

On the earnings call, an operations executive put it plainly: the main reason for the delays is power. Management said no capacity was cancelled and that it is speeding up on-site power from Bloom Energy, whose fuel cells generate electricity at the site.

Chief executive Arkady Volozh wrote in his shareholder letter that delays have come where Nebius relies on third parties. The company says most of its new capacity will be built on sites it owns in Alabama, Missouri and Finland, where it does not depend on an outside operator.

The delay has a direct price tag. Nebius now expects 2026 revenue at the low end of its $3.0 billion to $3.4 billion range, below the roughly $3.35 billion analysts expected. A target of more than $7 billion in annualized revenue slipped from December to February. Revenue from delayed sites cannot be booked until the power is on and the capacity is handed over.

Customers are paying more, and paying first

For buyers of AI computing, the more important numbers are about price. Nebius says contracts signed in the third quarter were worth more than $25 million per megawatt of capacity, up from $20 million to $25 million in the second quarter. Summaries of the results put the rise in hourly chip rental prices on new contracts at more than 20% from the prior quarter.

Volozh said customers are committing for longer and at higher prices. Nebius says it signed more than $12 billion in new contract value since the start of the third quarter, with Databricks and Snowflake among new multiyear customers.

The bigger shift is who pays for construction. Nebius says customer prepayments on third-quarter deals covered more than 100% of the cost of building the capacity, up from 50% to 60% in the second quarter. In effect, its customers are financing the data centers they will later rent.

Management said the payback period on new capacity has shortened to about 19 months. For buyers, the message is less comfortable: securing AI computing increasingly means handing over cash well before it is used, at rising prices.

A much bigger bill for 2027

What spooked investors most was the size of the spending plan. Nebius raised its 2026 capital spending forecast to about $27 billion, from $20 billion to $25 billion. For 2027 it expects $40 billion to $45 billion, against about $28.8 billion that analysts tracked by FactSet had forecast.

It also gave its first 2027 revenue forecast, of $12 billion to $13 billion, roughly four times this year. The company called that outlook conservative about the pace of its build-out. It expects to reach breakeven before tax in the fourth quarter of 2027.

Nebius says customer prepayments and loans backed by its customer contracts should fund 75% to 85% of 2027 spending. It expects $17 billion to $20 billion of prepayments next year. The rest still has to come from somewhere.

That matters because lower-rated AI borrowers have found debt markets harder to tap, 404K Research reported, citing Goldman Sachs data. Nebius dropped plans for a high-yield bond and instead took a one-year, $3.5 billion loan from Citi in October, TheStreet reported.

Timing did not help. Nvidia, which invested $2 billion in Nebius in March, said the same day that its chief executive was stepping down, TheStreet reported, and rival AI cloud stocks such as CoreWeave and IREN also fell.

What to watch

Nebius says it has more than 4 gigawatts of power under contract and expects 5 gigawatts by year end. The question for investors is how much of that becomes working, paid capacity on schedule.

For companies buying AI computing, the lesson is that a signed contract is not delivered capacity. Even a well-funded provider can slip months when a site's electricity plan changes. Buyers should ask who controls the power at each site, and what happens to their prepayment if it is late.