Nebius plans to spend $40 billion in 2027, but delays in New Jersey are already hurting the business

An ambitious plan amid growing risks

Nebius, a company that rents out computing capacity for AI, on its third-quarter earnings call unveiled a spending plan of $40 billion for 2027 — noticeably more than Wall Street expected. TechCrunch reports. The construction is to be financed mainly through customer prepayments and loans secured by customer contracts: in essence, the future value of data centers is used to pay for their construction. According to CFO Maria Del Dado Alonso Sánchez, prepayments and investment-grade contract-backed financing should cover up to 85% of the $40–45 billion in capital expenditures planned for 2027; she named Microsoft and Meta among the contracts that could be financed this way. Nebius forecasts 2027 revenue of $12–13 billion and reaching breakeven before taxes by the fourth quarter.

Delays in New Jersey and a regulator's fine

The key source of trouble is the data center in Vineland, New Jersey, where Microsoft is paying for capacity under a Nebius contract worth up to $19.4 billion. Timelines have already slipped: only slightly more than half of Microsoft's capacity is expected to be delivered by the end of the year, with the rest in the second quarter of 2027. According to product and infrastructure director Andrey Korolenko, the site operator DataOne 'decided to wind down temporary generation faster than expected' during the transition to Bloom Energy fuel cells. The transition, however, was not entirely voluntary: in August, the outlet Floodlight found at least 45 gas generators operating without permits at the DataOne site, and New Jersey regulators fined the facility $1.1 million, finding that the use of the generators violated federal law. DataOne also faced a lawsuit from neighbors over a constant hum allegedly coming from the data center.

What this means for the Microsoft contract

According to Nebius's description of the terms of the Microsoft contract, Microsoft may terminate the affected services after a grace periodif deadlines are missed and alternative capacity is not offered; the contract also provides for financial penalties for delays. The tranches were originally supposed to be deployed in 2025–2026, so delivery in the second quarter of 2027 falls well outside that window. Nebius said Microsoft 'was involved in the planning process,' but did not clarify whether it agreed to the new timelines; publicly, Microsoft has canceled nothing. TechCrunch reached out to Nebius, Microsoft, and DataOne for comment.

Microsoft cools toward 'neoclouds'

The context for Nebius is complicated by a Bloomberg report: Microsoft is tightening oversight of projects carried out by third parties — including Nebius, IREN, and Nscale — and is discussing whether to sign new agreements; Microsoft employees were even sent to the New Jersey site. In its own quarterly report, Microsoft noted that its capital expenditures came in below expectations due to delays at third parties. Bloomberg also reported that Microsoft will not exercise its option to more than double the Nscale agreement for a data center in Texas, and recently ceased to be the anchor customer for Nscale's planned site in Essex due to power supply problems. Nebius CEO Arkady Volozh acknowledged on the call: 'Building at this scale is hard, and delays are currently part of our industry. We are no exception.'

The quarter's financial picture

Nebius's third-quarter revenue came to $981 million, up 571% year over year; roughly a third of that amount came from a one-time payment tied to a new partnership model. The company cut its 2026 revenue forecast by $200 million, to $3 billion, citing delays at third-party sites, including the one in New Jersey. At the end of the quarter, Nebius had $7.4 billion in cash, and chief revenue officer Mark Boroditsky said that prepayments on new deals signed in the third quarter more than cover the cost of building the corresponding capacity. The company's shares fell 17% by the end of the day. Nebius claims the delays only affect sites it does not control, and that its own data centers are launching on time or early — it is these, the company says, that will provide most of the new capacity from 2027 onward.