When is a startup not a startup? When it’s a public company with 1,300 employees and $2.5 billion in capital. This is the reality for Nebius, an AI infrastructure business that has emerged from the remnants of Yandex, a once-prominent Russian company often compared to Google. Despite its startup-like qualities, Nebius is actually an unusually large startup with ambitious plans for growth, requiring even more resources, people, and capital.
Nebius was born out of the Yandex implosion, which began when Arkady Volozh, Yandex co-founder and former CEO, was forced out of the company in 2022 due to EU sanctions following Russia’s invasion of Ukraine. However, Volozh was later removed from the sanctions list and returned to lead Yandex’s next incarnation, which operates outside of Russia.
Yandex had a complicated structure, with Yandex LLC as the Russian company and Yandex N.V. as its Dutch holding organization. Yandex N.V. went public in 2011 on the Nasdaq and later listed on the Moscow Exchange. However, the Russia-Ukraine conflict led to trading halt and the delisting of several Russian-affiliated companies, including Yandex. The company appealed to maintain its listing and reached an agreement to sell its Russian assets to a consortium for $5.4 billion.
Now, rebranded as Nebius AI, the company is positioning itself as a full-stack AI infrastructure provider. It plans to build a large-scale network of GPUs (graphics processing units) and become a major player in Europe. Nebius already has a data center in Finland inherited from Yandex and a partnership with Nvidia. The company aims to triple the capacity at its current facility and expand to other data centers across Europe.
Though Nebius is technically not a startup, it is starting anew with the few assets it has left. It also benefits from the experience of its engineers who have been building compute infrastructure at scale for over 15 years. The company plans to regain its full public status and work with the Securities and Exchange Commission (SEC) and Nasdaq to achieve that.
While Nebius faces competition from big tech companies and dedicated GPU-as-a-service startups, it believes being a public company will give it an advantage in raising capital and attracting investors looking for exposure to the AI infrastructure market. Moreover, Nebius offers an alternative investment option outside of the usual players like Microsoft and Google.
One of Nebius’ strengths is its talent pool of 1,300 employees, mostly engineers transitioning from the old Yandex business. The company has offices in Amsterdam, Israel, the US (Austin, Texas), and Belgrade. The geographic spread was a result of circumstances, with the company’s subsidiaries originally based in different locations and workers seeking refuge from the conflict.
Despite the challenges and efforts involved in rebuilding the company, Volozh remains optimistic about Nebius’ future. He compares the experience to launching new companies within Yandex and expresses excitement for the opportunities ahead.
In conclusion, Nebius is a unique startup-like entity with the backing of a public company’s resources and capital. It aims to become a major player in the AI infrastructure market in Europe, leveraging its existing assets and strong engineering team. As a public company, Nebius offers investors an alternative option for exposure to the AI infrastructure space.
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