Nebius is seeking to raise $4.5 billion through convertible bonds to establish AI data centers.

      Nebius Group announced on Wednesday its intention to raise $4.5 billion through the sale of convertible bonds, which will be allocated towards constructing data centers for artificial intelligence. The Amsterdam-based firm disclosed its plan in a statement.

      The offering is divided into two segments. Nebius is issuing $2.75 billion in notes set to mature in 2030, and an additional $1.75 billion in notes maturing in 2034. These bonds are being sold privately to major institutional investors, who have the option to acquire up to $675 million more within 13 days of the initial issuance. This additional allocation consists of $375 million in 2030 notes and $300 million in 2034 notes.

      Nebius stated that the capital will support the expansion of its operations, including the construction and enhancement of data centers, the development of its AI cloud platform, and the procurement of essential components, particularly the graphics chips powering AI systems.

      Details on the bonds and market response

      The bonds are convertible, allowing holders to exchange them for Nebius shares under specific conditions, rather than opting for cash repayment only. The 2030 notes are reported to have a coupon rate between zero and 0.5 percent, while the 2034 notes have a rate of 4 to 4.5 percent, according to sources cited by Bloomberg. The news agency noted that Nebius anticipated pricing the offering later on Wednesday.

      According to Bloomberg, four banks, including Goldman Sachs, JPMorgan, Citigroup, and Bank of America, are facilitating the sale. Representatives from Goldman Sachs, Citigroup, and Bank of America declined to comment, and Nebius and JPMorgan did not respond to inquiries.

      Following this announcement, Nebius's stock price experienced significant volatility, dropping as much as 9.2 percent in US premarket trade on Wednesday, as reported by Bloomberg. This decline followed a remarkable 197 percent increase in the stock price up to Tuesday’s close.

      Nebius stated that the notes will be senior, unsecured obligations, paying interest biannually. The company cannot redeem either series before 2028, except under certain tax changes. Additionally, Nebius can settle any conversions with cash, shares, or a combination of both at its discretion.

      Exchanging older debt for shares

      Alongside the new bond issuance, Nebius indicated that it plans to negotiate separate agreements with holders of its existing convertible notes, including 2 percent notes due 2029 and 3 percent notes due 2031. The arrangements would allow holders to exchange part of their older debt for Nebius Class A shares.

      The company warned that it would negotiate terms with each note holder individually, and investments made could lead to share sales or adjustments in related trades, impacting the share price. It also clarified that the bond sale was not contingent on these exchanges taking place and there were no guarantees any such agreements would be finalized.

      A second major fundraising effort within a year

      This marks the second time in 2026 that Nebius has engaged the convertible market, having previously raised approximately $4.3 billion in a larger sale earlier this year, as reported by Bloomberg. That transaction followed a supply agreement with Meta. The company has also borrowed against its GPUs for fundraising.

      Nebius belongs to a category of firms known as neoclouds, which develop and operate data centers filled with graphics chips, offering computational power to AI and other businesses, along with the software needed to manage their systems. It has secured multi-billion-dollar supply contracts with Meta and Microsoft, and in May, it acquired Eigen, a US startup specializing in tuning open-source AI models, for around $643 million in cash and stock, according to Tech.eu.

      This operational model requires substantial capital investment. The chips are expensive, and companies typically enter into lengthy supply contracts that necessitate building sufficient capacity. Nebius has noted that a significant portion of its recent revenue has come from advance payments from clients, which facilitates the build-out but also obligates them to deliver. The convertible market has become a popular route for these companies to raise considerable funds while offering investors a low cash coupon in exchange for the potential to convert into equity later.

      Nebius trades on the Nasdaq under the ticker NBIS, with founder Arkady Volozh at the helm. The company has experienced rapid growth, reporting substantial revenue increases in the second quarter, mainly from advance payments by customers. It has also finalized capacity agreements, including a $1 billion deal with AI startup Reflection.

      Funding the expansion

      This fundraising initiative is part of a larger effort to finance the data centers essential for AI technologies. Constructing and equipping these centers with chips is costly, prompting companies to seek debt, equity sales, and other financing options. In Europe, firms are hastily securing compute capacity, while in the US, regulators are determining how to approach the financing of these facilities.

      Nebius has already utilized several of these financing methods, including raising debt secured by its graphics chips, issuing