[ad_1]
On October 21, a new ticker was opened for Nasdaq traders: NBIStruncation Nebiusan emerging player in the AI cloud infrastructure space.
Casual observers could be forgiven for wondering where this company came from, as there was little of the usual hype that surrounds most startups’ journey to IPO — no roadshows; No horn; No celebrations laden with sweets. Nothing, not a peep. That’s because Nebius is an unusual beast: a public company, but a startup in almost every sense.
Nebius has been going public for 13 years, going public in May 2011 under the name Yandex NV – the Dutch holding company of Russian internet giant Yandex (often called the “Google of Russia”). At the end of 2021, Yandex NV reached a peak valuation of $31 billion, but in the wake of Russia Invasion of Ukraine In early 2022, everything changed. Nasdaq I stopped trading in Yandex NV shares in February due to sanctions on Russia’s subsidiaries, and a year later Nasdaq said it would delist Yandex entirely. But Yandex Successfully appealed On the basis that it was a restructuring – a process that could take an additional 16 months to fully complete.
Part of this included offloading all of its Russian assets, where most of the real business value lay. What remained under Yandex NV’s ownership was a random collection of infrastructure and business units that happened to be located outside of Russia. This divestment process ended in July, with Yandex NV changing its name to Nebius Ia cloud AI platform packed with its own Finnish data center.
He was to lead the new work Arkady Voloz (pictured above), co-founder and former CEO of Russian company Yandex It has been removed from the European sanctions list In March after that Publicly condemned Russia’s attack on Ukraine.
Nebius’s core business sells GPUs (graphics processing units) “as a service” to companies that need the “compute” — that is, the processing power and resources needed to perform computational tasks such as running algorithms and executing machine learning models. last month, The company debuted A comprehensive cloud computing platform designed for the “full machine learning lifecycle,” which includes data processing, training, tuning, and inference.
With the restructuring completed, and Voloz free to run the offering from the company’s new headquarters in the Netherlands, Nasdaq gave Nebius the green light to resume trading last month. However, the situation was largely unprecedented: a public company whose trading was temporarily halted, only to resume trading nearly three years later under a new name and a completely different business proposition?
In many ways, it made sense to delist and grow using private capital, the good old-fashioned way for startups. But as Follows explained to TechCrunch earlier this year, building infrastructure is capital-intensive, and the easiest and cheapest way to access capital in what is currently one of the hottest areas in technology is through the public markets. But there was absolutely no certainty about how the public markets would respond to this strange new entity. No one really knows what to expect.
A month later, Nebius enjoyed a somewhat tepid return to public life; It has fallen significantly from its market capitalization of $18 billion before trading was halted in February 2022, which was expected, and since then its value has ranged between $3.5 billion and $4.75 billion, with some signs that it is beginning to stabilize.
“We couldn’t predict what was going to happen,” Follows told TechCrunch in an interview in London this month. “It could be $5 per share, or it could be $50 per share — this has never happened before, and no one really knows how to deal with it.” “With him.” . “The situation is still volatile, but it is stabilizing, and the good thing is that it has stabilized above the cost of assets, which means the market believes we will be able to build business here. We will see how big the business is.”
Nebius competes with all the usual high-volume cloud giants, although its most direct competitors are other alternative cloud startups like CoreWeave, which I made a ton of cash this year. With CoreWeave in the midst of expanding from the US to Europe, Nebius is moving in the other direction, Announcing plans this week to expand its presence into the US with a new GPU cluster in Kansas City (on the Missouri side) scheduled to break ground in early 2025. The company has also opened “customer centers” in San Francisco and Dallas, with plans for a third in New York By the end of the year.
But while the cloud infrastructure business is its bread and butter (accounting for two-thirds of its revenue),… According to its first earnings report Last month), there is a trio of additional companies under the Nebius Group umbrella. This includes a self-driving vehicle company called AfriedHeadquartered in Texas; It’s called an AI and LLM company based in Switzerland Toluca; And edtech platform TripleTenlocated in Wyoming.
Driving time
Avride hails from the international division of Yandex’s self-driving unit, which spun out of a joint venture with Uber in 2020. While Alphabet’s Waymo now leads the way in the burgeoning robotaxi world, recently securing a $45 billion valuation, Yandex was an early pioneer In Russia, where Voloz noted that the company was on the verge of defeat Waymo launch The first fully self-driving cars on public roads, before war put the kibosh on the plans.
“They (Yandex) were scheduled to launch the first taxis on public roads without anyone behind the wheel, in a real city (Moscow), several months before Waymo launched in San Francisco,” Voloz said. “Journalists were invited to a big event on March 22, but that launch never happened. People had to pack all their bags and go within weeks.
The team that was working on Yandex’s autonomous vehicle project has moved to Avride, its new brand Fired Last year, he eventually moved to Austin via Tel Aviv.
“These are the same 250 people,” Folloz added.
Last month, Offred Announced an important multi-year partnership With Uber, which has seen its Avride curbside food delivery robots land on Uber Eats Start in Austinalthough the partnership will also bring Avride self-driving cars to Uber’s platform later (Uber has signed other similar deals, including with Google sister company Waymo).
While Yandex has deep enough pockets to fund self-driving vehicle projects, Nebius does not — it has a few billion dollars in the bank from its divestment in Russia, and is heavily focused on building out its cloud infrastructure business. That’s why Voloz says Avride will need to find additional long-term partners.
“They have enough budget for this year and next year,” Follows said. “We are financing them, but they need to use this time to find new partners, because building fleets requires a lot of capital. It needs real investment.”
Obvious partners would include automakers, but it could be any entity willing to invest billions, with Follows adding that he would be willing to give up control of Avride if necessary.
Meanwhile, Toloka is a platform that specializes in data classification and quality control for large language models (LLMs) and related AI systems – it’s very similar to Artificial intelligence scaleWhich was recently estimated to be worth more than $13 billion. Toloka has clear synergies with Nebius’ core infrastructure business, but the customers are not the same. Nebius works largely with AI startups seeking computing, while Toloka works with larger companies like Amazon and Hugging Face that want to improve their MBA.
Both Toloka and Avride could eventually follow a similar path to his Clickhousecreators of the open source database management system that spun off from Yandex In 2021. While the ClickHouse business entity has garnered big-name backers such as Index Ventures, Benchmark Capital, and Coatue, Nebius has retained a minority stake.
“ClickHouse has become very popular, and venture funds have approached us to create a business around the open source project. Now they have revenue, and they are growing,” Fulloz said.
TripleTen, on the other hand, is something of an oddity in the Nebius family of companies, as it is largely a direct-to-consumer product that offers online coding bootcamps for those who want to move into the tech sector. One idea Nebius is toying with is to position itself as a provider of a “full range of services” for AI companies, from data center and GPU infrastructure, to education. This highlights the situation Nebius finds himself in: he draws lines between the various entities he is left with, and tries to make sense of it all.
Currently, TripleTen has broken even, and Volozh admits it will not be as big a revenue driver as its infrastructure business – but it has the potential to provide useful income and will remain part of the Nebius Group.
“Nebios is a billion-dollar company,” Follows said. “TripleTen — it’s a nice model, but it’s probably a tens or hundreds of millions of dollars business. It’s not a billion-dollar business.”
Parallel account
As for Nebius AI’s core cloud business, the company already has a wholly-owned data center facility in Finland, with It plans to triple its capacity To 75 megawatts. In parallel, the company is building additional sites at its co-location facilities, a move designed not only to increase its capacity, but also to reduce latency by bringing processing closer to its customers. In addition to the Kansas location announced this week, Nebbius has already been unveiled New GPU cluster in Paris Which goes online this month.
In the future, Nebius plans to build more of its own data centers, both in Europe and the US, but given the time it takes, it is faster to fill the gap with co-location facilities, which is why it is moving forward with creating a hybrid approach.
“It would be more efficient if we built it ourselves, but construction means a year and a half or two years — it’s a long process, and we can’t wait,” Volos said. “That’s why we have these co-locations in Paris and Kansas City.”
[ad_2]