Bypassing the energy crisis: Volozh's Nebius chose Finland for a $10 billion data center

AI infrastructure provider Nebius Group has decided to build one of Europe's largest artificial intelligence computing facilities in Finland. Arkady Volozh's company chose the site because of its inexpensive green energy and cold climate, which allow it to cut costs amid the energy crisis European countries are facing due to the Iranian war. Nebius shares on the Nasdaq premarket returned to growth after a three-day slump.

Nebius will build a 310-megawatt AI data center in the Finnish city of Lappeenranta near the eastern border with Russia. The company plans to put it into operation in stages, starting in 2027. Once fully deployed, the data center in Finland will be "one of the largest" on the continent, the cloud provider said in a statement.

It will also be Nebius' largest data center outside the U.S., surpassing the 240 MW facility near Lille in France announced in February. The Finnish project will eventually cover about 10% of Nebius' contracted capacity, with investment in excess of $10 billion, Reuters reports. The company's largest operating European data center, a 75 MW site in Mäntsälä, is also located in Finland, the agency notes.

Finland is considered an attractive location for data centers because of its low electricity tariffs, availability of renewable energy and cold climate that reduces cooling costs, Reuters explains. Nebius concluded that Lappeenranta met all of the project's requirements, including the ease of obtaining land for development and the high capacity of the power grid. As the AI company's communications director Tom Blackwell explained to the agency, it praises not only the site itself, but also the general business environment, finding the Finnish "ecosystem very favorable."

Nebius stock is up nearly 3% in Nasdaq pre-market trading on March 31, recovering from a 19.8% collapse in the last three trading sessions. The stock was getting cheaper due to investors' fears of dilution of shareholder stakes and growing debt load. The market is spooked by Nebius' $4.34 billion convertible bond offering and looming liquidity shortage - the company's investment program will require $16-20 billion in 2026, TipRanks points out.

These concerns were outweighed by a positive backdrop, including a landmark $27 billion contract with Meta Platforms. The deal confirmed Nebius' high potential in the cloud segment. However, the market is now torn "between faith in the prospects of hypergrowth and anxiety over the financial burden in the near term," writes TipRanks.

Wall Street analyst sentiment on Nebius stock has improved over the past month, with the number of buy recommendations (Buy and Overweight ratings) increasing from 11 to 13 and the only bearish rating (Underweight) being withdrawn, according to FactSet.

The average target price of $172.6 per share calculated by the service implies 87% growth of the stock price in the nearest year.

This article was AI-translated and verified by a human editor