Backed by investors including Nvidia (NASDAQ:NVDA), Accel, and accounts run under Orbis Investments, AI infrastructure company Nebius Group (NBIS) announced a $700 million private placement on Monday. The funds will help Nebius expand, since it creates infrastructure for the advancement of artificial intelligence. The financing consists in the issuance of 33,333, 334 Class A shares at $21 each, a 3% premium to the volume-weighted average price since Nasdaq trading started for Nebius. The oversubscribed placement reflected great investor interest.

• Warning! GuruFocus has detected 4 Warning Signs with NVDA.

Born in July from a $5.4 billion asset split of Russian internet behemoth Yandex, Nebius intends to utilize the money to grow its clusters of graphics processing units (GPUs), cloud platforms, and developer tools. According to founder Arkady Volozh, the funding would hasten growth, therefore augmenting the $1 billion the company has pledged to invest by mid-2025. Nebius is leasing data center space in Kansas City, Missouri, and investigating more U.S. expansion; over half of its customers are from the United States.

Rising from a previous lower-end estimate of $500 million, the business updated its yearly run-rate revenue projection for year-end 2025 to between $750 million and $1 billion. Citing significant investor involvement and better Nasdaq trading prices, Nebius also called off a scheduled share buyback.

With over a 55% CAGR, Nvidia has bounced from its lows in recent months and is up over 25% in the past six months.