How Nebius Group Plans to Capture AI Infrastructure Dominance Through Data Center Scaling

The AI infrastructure market is rapidly consolidating around a few key players, with Nebius Group N.V. (NBIS) positioning itself as a serious contender by aggressively building out global data center capacity. The company recognizes that in today’s power-constrained environment, the ability to secure reliable computing infrastructure has become the primary competitive advantage.

The Power Capacity Strategy Behind Nebius’ Growth

Unlike many competitors, Nebius is taking a forward-thinking approach by locking in power capacity years before deploying servers. Management disclosed that the company has already contracted substantial long-term power agreements, which effectively de-risks its expansion roadmap and provides revenue visibility. This contracting-first strategy means much of the upcoming data center capacity comes pre-committed—customer demand is already secured before facilities even become operational.

The numbers reflect this ambition. Nebius is targeting 2.5 gigawatts of contracted power capacity by 2026, representing a significant step-up from earlier guidance of 1 gigawatt. By the end of 2026, the company aims to have 800 megawatts to 1 gigawatt of fully operational and connected data center infrastructure. This staged approach balances aggressive growth with pragmatic execution, reducing the risk of stranded assets in a rapidly evolving market.

Recent Expansion and Geographic Diversification

The company’s recent launches demonstrate this strategy in action. In Q3 2025, Nebius brought its Israel facility online equipped with B200 GPUs, while simultaneously launching its United Kingdom data center featuring B300 accelerators. Both deployments came with substantial customer commitments already in place, minimizing revenue uncertainty. Looking ahead, the company is preparing to introduce GB300 capabilities, positioning itself at the technological frontier.

For 2026, Nebius plans to expand existing footprints in the U.K., Israel, and New Jersey while simultaneously commissioning fresh facilities across the United States and Europe in the first half of the year. Management is actively securing multiple large-scale sites capable of supporting hundreds of megawatts each, with several expected to be online before year-end 2026. This geographic diversification reduces dependence on any single region and mirrors the power-diversification strategy that has proven successful in the industry.

Revenue Projections and Market Position

The company is targeting $7–$9 billion in annual recurring revenue by 2026, a projection that hinges on successful execution of its data center roadmap. This ambitious target assumes continued strong demand for AI compute from enterprise customers and maintained pricing power despite increasing competition.

The Competitive Landscape: A Tightening Market

Competition in the AI infrastructure space is intensifying. CoreWeave operates across a supply-constrained market where demand vastly exceeds available capacity. In Q3 2025, CoreWeave expanded its active power footprint to approximately 590 megawatts and increased contracted power to around 2.9 gigawatts. The company generated $5.05–$5.15 billion in projected 2025 revenue with 134% year-over-year growth in Q3, though data center delays and supply constraints pose near-term headwinds.

Meanwhile, other established cloud providers are mobilizing massive resources. One major technology company plans to increase total AI capacity by over 80% in 2025 and intends to roughly double its data center footprint over the next two years. This competitor has deployed large-scale clusters of cutting-edge accelerators and is constructing infrastructure spanning the entire AI lifecycle—from model pre-training through post-training and inference workloads.

The competition for power capacity and GPU allocation is fierce, and execution risk remains substantial. Macroeconomic uncertainty, rising operational costs, and massive capital requirements create headwinds that could pressure margins across the sector.

Valuation Concerns Amid Growth Optimism

Despite a 213% share price gain over the past year—significantly outpacing the Internet Software Services industry’s 29.4% return—Nebius appears to trade at a premium valuation. On a Price-to-Book basis, NBIS shares trade at 5.04X compared to the industry average of 3.92X, suggesting the market is pricing in significant future growth.

Consensus earnings estimates have seen downward revisions over the past two months, introducing some caution into the narrative. The market is clearly betting on Nebius’ ability to convert its data center investments into sustainable profitability while navigating an increasingly crowded competitive environment.

The Bottom Line

Nebius’ growth story rests on its capacity to scale data centers faster than competition while maintaining pricing discipline in an evolving market. The company’s forward contracting of power and pre-selling of capacity demonstrates sophisticated risk management, but execution on such an ambitious buildout schedule amid supply chain challenges and intense competition remains the key variable. Success would position Nebius as a meaningful player in the AI infrastructure ecosystem; failure would expose shareholders to significant downside risk.