AI infrastructure company Nebius Group secured $700m in a private placement from investors, including Nvidia, Accel, and Orbis Investments, Reuters reports.

This funding follows Nebius’ emergence in July after a $5.4bn deal to split Russian internet giant Yandex’s domestic and international assets.

Nebius was founded by former Yandex founder and CEO Arkady Volozh.

Trading in Nasdaq-listed Yandex was suspended after Russia’s invasion of Ukraine, leading to Nebius reviving the listing as part of the asset split.

The news publication quoted Volozh as stating that the $700m financing would enable Nebius to expand the clusters of graphics processing units (GPUs), cloud platforms and other tools for AI developers rapidly.

The company has committed to investing $1bn by mid-2025, with Volozh indicating that this amount could increase.

Nebius is leasing data centre space in Kansas City, Missouri, and may further expand in the US, where more than half of its clients are based.

The company would issue 33,333,334 Class A shares at a $21 per share in the private placement, representing nearly 3% premium to the volume-weighted average price of those shares since Nasdaq trading resumed.

Nebius noted that its financing round was oversubscribed, enabling the company to raise its projected annualised run-rate revenue to between $750m and $1bn by the end of 2025, up from a previous lower-end estimate of $500 million.

Additionally, Nebius confirmed that it would no longer proceed with a share buyback plan.

The buyback had been approved following the completion of the Russia split deal and before the resumption of Nasdaq trading.

The news agency quoted Nebius board chairman John Boynton as saying: “Based on the strong level of investor engagement and technical dynamics which we have observed following the resumption of trading on Nasdaq, we believe that those shareholders who may have wanted to exit have had an opportunity to do so at a price higher than the maximum repurchase price authorised by shareholders.”