Welcome to Nebius Group's Q1 2026 earnings conference call. The presentation will be followed by a Q&A session. If you would like to ask a question, you can click the Ask a Question tab in the top ri ght of the live stream player. Just type in your question and click Submit. You can submit questions at any time during the presentation, and the Nebius management team will try and answer them during the Q&A portion of the call. I will now hand over to Gili Naftalovich, Head of Investor Relations, to start the call.
Hi, everyone, and welcome to Nebius' first quarter 2026 earnings conference call. Joining us on the call today are Co-founder and CEO, Arkady, and our CFO, Dado, along with the broader Nebius executive management team. Now, I'll quickly cover the safe harbor. Some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to our Form 20-F, which has a list of our risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both GAAP and non-GAAP financial measures.
A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is distributed and available to the public through our investor relations website located at nebius.com. Now I'd like to turn the call over to Arkady.
Thanks, Gili, and welcome everyone to our call. We have had a great start to the year. We're building an AI-native hyperscaler. I would say we're developing it across 4 dimensions. The first is capacity and scale. Second, product and functionality. Third dimension is customers and demand. Finally, capital, our 4th dimension. All of our focus is on execution across all 4 of these dimensions. Let me put our results of the quarter in this context. First, on capacity. As you see, we are building big. Last quarter, we told you that we already contracted more than 2 gigawatt of power while targeting more than 3 gigawatt by the end of the year. 3 months later today, we have already contracted more than 3.5 gigawatt. We are now targeting at least 4 gigawatt of contracted power this year.
Today, we announced a new site in Pennsylvania to support 1.2 gigawatt of power once fully lit live. This is our second owned gigawatt scale site in the United States. Our platform is most efficient when we own the full stack, and we are building towards that. Our owned contracted capacity now accounts for more than 75% of our total power. More importantly, we continue to build our full stack platform, and this is our second dimension. What does it mean? It means, we don't just offer compute, we offer cloud services. Services that span across the AI lifecycle, from bare metal to multi-tenancy to inference to agentic and more. We have made significant progress in on that front. It's not just developing our platform and launching Aster version 3.5 this quarter.
Our 3 acquisitions this year, Tavily, Eigen AI, and Clarifai demonstrate the uniqueness of what we're building. All 3 companies bring industry leading engineers and researchers to Nebius. Eigen AI and Clarifai strengthen our inference optimization solutions. Eigen AI was recognized as the number 1 speed inference provider by NVIDIA. While Eigen AI optimizes at the model level, Clarifai optimizes at the system level, and they both strengthen our in-house Token Factory offering. We also acquired Tavily earlier this year, extending our platform reach to agentic search, an increasingly significant part of the market. This acquisition brought us a rare capabilities of what this new class of developers need. We also expanded our technology partnership with NVIDIA. We again achieved NVIDIA Exemplar Cloud status, this time on our GB300 for training workloads. We're among a small group of providers to achieve this status across multiple GPU generations.
At our core, we're a technology company. We have top AI engineers and deep proprietary expertise across every layer of the stack, both hardware and software. We're quickly becoming a magnet for top talent. We're happy with our ability to enlarge our offering through strategic acquisitions. Our clients appreciate the full extent of our offering. This is not common in our market. This is our strengths, and this is our uniqueness. We believe this is what will enable us to win. Demand is our third dimension, and it continues to be increasingly strong, but more importantly, our full stack platform allows us to capture and service a large and diverse range of hundreds of customers, not just several big bare metal of takers.
Our pipeline generation in the first quarter grew 3.4-3.5 times over the fourth quarter. This is a record for us. The demand is broadening across industries. Today, we typically see several customers competing for every GPU we bring online. We're building to support this demand with scale and discipline. New customers across a number of use cases are using our full range of offerings to solve their most challenging problems. For example, European FinTech leader, Revolut, recently began using our Token Factory. In physical AI, 1X Technologies is using our cloud platform to build general purpose robots. In life sciences, our cloud platform is enabling startups to build more powerful models that accelerate drug discovery and advance the fight against diseases in ways that were previously impossible.
Beyond technology sectors, larger companies in industries such as manufacturing, energy, heavy equipment, and pharmaceuticals are increasingly engaging with us. Demand is high. Everything we build with is sold. That is what is driving us to build more and to raise our 2026 CapEx guidance to between $20 billion and $25 billion, which is up from our prior range of $16 billion to $20 billion. This increase reflects investments in our 2027 capacity that will come online early next year. We expect these investments to contribute positively to revenue in the first half of 2027, where we already have customer and commitments in place. Meta is one such customer. We need to invest to fully realize it. This requires capital, which is our fourth dimension. We're doing a very good job in tapping the market at scale.
We raised significant capital this year, more than $6 billion. More than $4 billion of that came from converts and $2 billion from NVIDIA equity investment. This leaves us with a strong cash position of more than $9 billion. More importantly, we have laid the foundation to raise substantial further capital this year. There are a variety of ways for us to do this. There is our recent Meta contract. First, let me just say that we're very proud of our relationship with Meta, and there is tremendous respect between our tech teams. Formally, this is a $27 billion contract with Meta, but in fact, it's worth a lot more for us. This contract alone can unlock billions of dollars of capital for our own multi-tenant cloud at attractive rates that may not otherwise be available to us.
On top of this, we also have our first contract with Meta and our Microsoft agreement that will provide additional financing opportunities. Obviously, there are many other untapped options for us to finance our public cloud build-out, from the significant prepayments we get from customers to asset-backed financing of our paymaster contracts, to corporate debt, and so on. To close, it has been a great quarter. We're even more focused on what is ahead. We will continue to execute, expanding capacity, building our cloud platform, expanding our customer reach, and financing growth diligently. Everything we build, we sell, and we are still in the very early days. I want to thank our team for the incredible work day after day and night after night, and to thank our shareholders for your continued support. With that, let me hand it over to Douglas.
Thank you, Arkady. Indeed, we are off to a strong start to the year with a number of important achievements. First, we accelerated revenue growth during the quarter. We also significantly expanded our margins, and we strengthened our balance sheet. I will touch on each of these, share some color on our results, and conclude with guidance. Please note that all comparisons are year-over-year unless noted otherwise. Let's start with our revenue and ARR. In Q1, we grew the group revenue by 684% year-on-year to $399 million, up 75% from Q4. Once again, we sold out our capacity as demand continued to exceed available supply. Our Nebius AI business, which excludes our consolidated investments in TripleTen and Avride, delivered even stronger results.
Revenue grew 841% from last year to $390 million, representing an 82% quarter-over-quarter increase and 98% of Group revenue. Growth was driven by capacity scaling and was further supported by strong utilization of pricing. Annualized run rate revenue for our Nebius AI business reached $1.9 billion at the end of March, up over 50% from $1.25 billion in the previous quarter. We delivered strong top-line growth, we also remain focused on profitability. Group-adjusted EBITDA was $130 million compared to $15 million last quarter and compared to a loss of $54 million a year ago. Group-adjusted EBITDA margin was 13%, continuing the inflection in Q4 and reflecting operating leverage in our model.
Nebius' AI business-adjusted EBITDA margin expanded to 45%, up from 24% in Q4. This improvement was driven by strong revenue growth. The gap between group and Nebius margin essentially reflects our investments in Avride and TripleTen. Both are still early-stage companies and require substantial operating investments as they scale. We expect Nebius to represent the significant majority of group-adjusted EBITDA for the foreseeable future. As mentioned in the past, our intention is to find strategic and financial partners for these businesses, then consolidate them in the future. Net income of $621 million benefited from a valuation adjustment on the back of ClickHouse recent RP round. This is a non-cash item that captures the growth in the underlying value of the asset. Now turning to our balance sheet. Since our last call, we have continued to strengthen our financial position.
In March, we closed a private offering of convertible senior notes, raising $4.3 billion in gross proceeds at attractive premiums and coupons of 1.25% and 2.60%. In the same month, we announced a $2 billion equity investment from NVIDIA, reinforcing our alignment with one of our key strategic partners. Prepayments from our customers also reached a new quarterly record. Operating cash flow of $2.3 billion was up from an operating cash outflow of $198 million in Q1 last year. The sharp increase was primarily driven by upfront payments from our customers. Together, these sources of capital increased cash and cash equivalents to $9.3 billion at quarter end. Let's speak about our CapEx.
As Arkady mentioned, today we are raising our CapEx expectations to $20 billion-$25 billion for the year. The expansion of our infrastructure footprint remains one of our highest priorities given the strength of market demand and customer activity. We are building for 2027 demands where we have customer commitments already in place. We have near-term visibility into future revenue associated with this investment. As always, we will invest in capacity with discipline and rigor, including the capacity we are bringing online in 2026. In terms of how we build and how we'll fund the capacity in the year ahead, we will continue to leverage a diversified range of funding sources. On the debt side, during the past year, we built our ability to take on debt capacity.
For example, with our Microsoft contract and our 2 Meta contracts, we expect to unlock the ability to raise significant capital through asset-backed financing. We expect this to be at attractive terms based on Microsoft and Meta credit ratings, we'll inject this capital into building our cloud business. In addition, we expect to raise corporate-level debt. We plan to start tapping into these financing options in the near term. On top of that, our financing options include our at-the-market program. We have not utilized this program to date, we are evaluating it regularly. Obviously, we are very focused on generating prepayments from our current and future customers in order to reduce the capital needed from equity and debt financing.
We may also evaluate other financing options, but we'll ultimately pursue whichever vehicles serve best the long-term interest of the business to support our expected capital spending in 2026. The bottom line is that as of now, given our strong balance sheet and the work we have done putting in place the various long-term contracts, we have laid the foundation to enable us to access a wide range of potential funding sources. Now, turning to our outlook for the year. While it remains early in the year, our strong Q1 performance reinforces our confidence in our annual targets. As such, we are reiterating our full year 2026 guidance for annualized run rate revenue of $7 billion-$9 billion, group revenue of between $3 billion and $3.4 billion, and group-adjusted EBITDA margin of around 40%.
3 key parameters will determine our growth profile and margin progression throughout the year: utilization, pricing, and capacity. At present, neither of the first 2 parameters is limiting our growth. The third, capacity, will play an important role in unlocking our growth potential and driving margin flow-through. On utilization, we continue to sell out our capacity, and we expect this to be the case for the foreseeable future due to strong market demand and our healthy pipeline. On pricing, strong market demand is translating into pricing gains in our latest deals. On capacity, the timeline of deploying the new capacity impacts both top and bottom-line results from quarter to quarter. We anticipate a nonlinear quarterly adjusted EBITDA margin progression during 2026. We will see this in Q2 given the backend-weighted nature of the capacity we bring online.
These investments unlock growth by increasing capacity substantially from Q2 to Q3, leading us to be confident in our adjusted EBITDA margin returning to Q1 levels in Q3 before moving even higher in Q4. We are confident in our full-year targets.
In closing, Q1 was another quarter of rigorous execution across the business. We delivered a strong revenue growth, margin expansion, new business wins, and continued capital discipline. As we look ahead, we will continue to scale rapidly to capture the tremendous market opportunity ahead, while remaining balanced, disciplined, and focused on delivering long-term value for our shareholders. With that, I'll turn the call back over to Gili for Q&A.
As a reminder, if you would like to ask a question, please click the Ask a Question tab in the top right of the live stream player, then just type in your question and click Submit.
Thank you, moderator. The first question from our investors on the portal is from Alexey Dubov, Goldman Sachs. To what extent have you started to see the impact of stronger GPU pricing reflecting in your core AI business? Additionally, is there a way for us to think about the share of older, shorter-term contracts that could benefit from this pricing dynamic? Mark, would you be able to answer this one for us?
Thank you, Alex. We continue to see strong pricing across both old and new GPU generations as demand continues to exceed our available capacity. We just raised prices again in the latest quarter, and we are still selling out across all chip types at the higher prices. We're in a very dynamic market, and we have built a resilient set of processes that allow us to adapt and respond accordingly in any market environment for both new and existing customers. The strength is showing up in a number of ways beyond just price. Contract durations are extending, with the average duration of contracts growing meaningfully over the past few quarters. Also, average contract values continue to increase across new logos and existing accounts, where we are seeing strong expansion as well. Finally, prepayments are becoming more significant.
Customers of all types are prepaying in order to lock in future capacity, including the hyperscalers. This improves our working capital position and gives us flexibility around external financing needs. Our go-to-market model is being built to be agile and adapt to the market and yield outcomes that can best help us continue to scale our business.
Thanks, Mark. We have a few questions coming in on CapEx guide and cost inflation. Andrey Korolenko, can you please discuss how much our raise in CapEx is driven by higher capacity growth versus component cost inflation?
Sure. Thanks, Gili. Well, the increase in this spending is driven by visibility into 2027, and our need to invest ahead of capacity that we expect to bring online. We'll add much more capacity in first half of 2027 than this year, that requires more CapEx spend in the, well, starting from now in the later part of this year. We have been able to secure sites and power and customer commitments for 2027, we are ramping up construction activities accordingly. In short, the high number reflects confidence in our contracted demand pipeline and our ability to secure the infrastructure to deliver against it. It's not the cost pressure.
The impact of the component inflation in our 2026 program was quite material around low single digits as a percentage of total spend. Because we secured a lot of 2026 back in 2025 at the previous price levels.
Thank you, Andrey. Next question we have is from James Kisner at Water Tower Research. Nebius said AI cloud-adjusted EBITDA margin nearly doubled quarter-over-quarter to 45% in Q1, while you're targeting around 40% for the full year. What's driving the implied step down? Can you walk us through the adjusted EBITDA margin progression for the year? Taro, please.
Thanks, James. Indeed, indeed. As you saw in the quarter, our Q1 margins were really strong. Nebius AI-adjusted EBITDA margin reached 45%, nearly doubling from Q4. That really reflects the underlying strength of the business. On the one hand side, the demand we are seeing in the market, the terms that we are also able to negotiate with our contracts and the unique economics of the platform itself. As I mentioned earlier, as we move throughout the year, you will see some quarter-to-quarter variability. I think this is worth, you know, taking a moment to explain the dynamic. We have made a number of important investments in the first half of the year. Hiring across go-to-market and engineering, our recent acquisitions, and continued development of new product capabilities.
Those investments are already in the cost base today. And we expect them to actually benefit from the business going forward. On the capacity side, our delivery this year is back-end weighted, and we have a meaningful step up coming in Q3. We have very clear visibility into both the investments that we have made and also the capacity that we are bringing online. Really, what you are seeing across the quarters is a timing dynamic, not a structural one. The investments land first, and the capacity and the revenue it supports come online shortly after. Given the timing of our investments in Q2 and the timing of the deployment towards the end of the quarter, we actually expect those margins in Q2 to go a little bit lower, returning to Q1 levels in Q3, and stepping even higher in Q4.
For the full year group, we expect a margin around 40% as we have guided. On the longer term, those dynamics will smooth over time and our capacity footprint continues to scale and higher value software solutions will become larger part of the mix.
Thank you, Dara. The next question is around capacity from Andrew Beal at Arete Research. Andrew, Andrey Korolenko, maybe I can come to you here. Can you talk about the timing of capacity additions beginning in Q2, and when you expect key sites such as Pennsylvania to reach full capacity?
Thanks, Gili. Andrew, first, about the Pennsylvania. Pennsylvania is gonna have lights up by the end of 2027 with the first around 250-300 MW probably. Then the schedule looks like adding 300 MW each year up to 1.2 GW in total. Actually, 1.2 GW according to our power contract we have in our possession by mid 2030 or the beginning of 2030, to be more correct, more precise. Overall, our capacity schedule is just ramping up. This year is heavily towards the second half of the year. Q3 is March is a very significant improvement for us in terms of the capacity going online.
Q4, also very significant. Q1 next year is where our bigger projects like Alabama and probably the first Missouri will kick in also.
Great. Thank you. We'll probably stick with you, Andrey, as we have a question from Josh Baer, Morgan Stanley. Can you address the media reports indicating delays at the Vineland, New Jersey site? Understanding you've delivered commitments so far, are there any delays to note for the remainder of the Microsoft contract?
We delivered all our capacity commitments across our Microsoft and Meta customers. The first Meta, as we already spoke, I believe the first Meta contract was fully delivered in Q1 this year. The Microsoft contract is way more stretched, and we have the delivery schedule up to the end of this year. We delivered the first tranche in November last year. We continue to be in the contract schedule. Again, it ramps up starting from the mid-year and most of the volumes will be coming in Q3 and Q4.
Great. Thank you. We have had a number of questions around the Meta contract. A question from Alex Platt is: Can you provide more details on the recently announced Meta deal? Can you explain how the $15 billion capacity option works? Should we vie w t his as Meta backstopping $15 billion with a set attractive margin? If you can get a customer with better unit economics on that capacity, will you take that instead? Mark, let me come to you here to walk us through this.
Thank you, Alex. First, I wanna say that we love working with Meta, and we're excited that they chose to buy more capacity from us. This expanded new agreement is to make sure that we all understand this, a 5-year contract for a total of $27 billion, and it is structured in 2 parts. First, there's a $12 billion commitment to dedicated compute capacity with delivery starting in early 2027. Second, as you pointed out, there's another $15 billion of additional capacity that we, at our discretion, can either allocate to Meta or sell to our AI Cloud customers as it comes online for the duration of the 5-year contract. Let me explain this in a bit more detail.
Meta is committed to buy up to $15 billion of any capacity in these clusters at our option during the entire five-year contract. This commitment will likely allow us to finance the clusters with asset-backed financing at attractive terms, while selling them to, as I think you pointed out, to our AI Cloud customers at potentially higher market prices. The unique combination of being able to sell at a premium along with the commitment by Meta to purchase any capacity during the contract should provide us with higher margins, less risk, and more visibility in our revenue. If the market remains strong, we should generate more than the $27 billion in revenue from this great agreement.
Thank you, Mark. We have a question from Alex Dubov, Goldman Sachs, about M&A. Could you explain the rationale behind your move to acquire Eigen AI and Clarifai? How does this move improve your AI cloud platform capabilities? To what extent does this move mean that you could improve customer stickiness? Roman, I think we'll go to you.
Yeah. Thank you, Gili. Thank you, Alex, for the question. First of all, I want to say that we're super excited with these two incredible teams of talented people from Eigen and Clarifai will join us. To deep dive in rationale, let's start from foundations. Our view is that we should own the compute stack. That is where our vertical integration, our supply chain depth, and our hardware engineering generate advantage, and it's also the layer that drives the bulk of our economics. Above the compute stack, we build the full cloud solution, and software plays the role of enabler.
By the way, we partner where partnership is the right path, and as you see now, we use M&A selectively where it accelerates our roadmap, brings in proven developer adoption, or adds capabilities complementary to what we are building. Acceleration is the key lens we apply to every potential transaction, where we can find rare talent or proven adoption. This is, by the way, the example of Tavily that has incredible developer adoption that would, in general, take us meaningfully longer to build organically. Acquisition is the fastest path. We evaluate every potential deal against the clear criteria. Does it deepen customer engagement, increase lifetime value, unlock the new category of the customers or use cases we can address, and in general, strengthen our position as a full stack AI cloud?
Thanks, Roman. We're getting more questions on M&A, so we'll likely stay with you here. Several participants are asking on whether Token Factory and software more broadly are distinctly different from the infrastructure layer and training. Would love to get your insights around agentic monetization and the opportunity there.
Yeah. Thank you for the question. As I said, we look at the software as an enabler. It's not that we build the software to generate a separate revenue stream. The software, first of all, plays the role of unlocking the new capabilities for us, unlocking the new opportunities and the types of the workloads that growing on the market and the types of the customers that we can address. Software change the shape of the customer relationship. Every layer of the software unlocks another group of users and the customers. We wanna meet customers where they need us and let them consume our vertically integrated solution in the way that they need, and it may be a different way for different types of the customers. Customers come to our platform for different needs.
In essence, they all need to run AI at scale, which means that they need compute. For example, people who use our multi-tenant cloud, they to a big extent come for large training jobs. These are, like, research-driven, data scientist-driven workloads. People who come to Token Factory, they build vertical AI vertical AI products or apply AI in their enterprises, they come for the tokens. Moving forward, we'll see new ways to consume infrastructure at scale that will be the agentic, end-to-end agentic workloads.
Thanks, all. We have a question from Tal Liani at Bank of America. How do you plan to finance the additional CapEx, and are you considering disposing some of your non-core holdings? Taro, over to you.
Happy to take this question, Tali. Well, our, look, our balance sheet is strong. At the end of the quarter, $9.3 billion of cash and cash equivalents, and this was supported by $2.3 billion of operating cash flow, which was generated in the quarter, right? Mainly, you know, coming from payments from our customers. Currently more than 90% of the CapEx range that we projected in February is already secured by cash and contractual commitments. The incremental capacity reflected in our raised $20 billion-$25 billion guidance will be funded through additional financing. As I have mentioned in previous calls, right? We have a wide range of sources available to us. On the debt side, we expect to use asset-backed financing against our contracts with Microsoft and Meta.
We may also raise corporate level debt. On the equity side, we have established an at the market program from up to $25 million Class A shares. We have not utilized these programs to date, we are evaluating the program regularly. In any case, as we have done today, we will apply consistent guardrails on cost of capital and shareholder dilution while maintaining a disciplined capital structure.
Thanks, Adam. We have gotten a few questions on pipeline. One from Neha Chokshi at Northland Capital. Your pipeline is up 3.5 times or quarter-over-quarter in 1Q 2026. Does this pipeline include hyperscalers like Meta, like the Meta deal? Can you also provide more details on what this number represents, and how likely are you to convert pipeline to revenue? Mark?
Thank you, Gili. Thank you, Neha. The referenced pipeline growth of 3.5 times a quarter, which 3.5 times quarter-over-quarter, which we're very proud of, is for our AI cloud business. It does not include any strategic hyperscaler deals like the Meta deal. It does include qualified opportunities across our core AI Cloud and Token Factory products, as well as across all of our key customer segments, including AI natives, software vendors, and enterprises. What we can share about conversion is that we have maintained our solid win rates at the same time as we've accelerated our sales cycles and increased our average selling prices.
You can see this with some of the strong wins that we have, such as Sword Health at in healthcare life sciences, and Rhoda AI and 1X in physical AI, and Core Automation, one of our AI native model builders, as well as Revolut and monday.com, new customer wins for Token Factory. What we are doing is enabling our go-to-market teams to have a consultative conversation with our customers about their plans and for current and future workloads, including, as an example, what they're thinking about with regard to Vera Rubin. We're also focusing and scaling our go-to-market and success teams to help customers to realize their plans, which turns into durable revenue for us.
Speaking about scaling, by the way, we have a number of recent appointments, including key leaders for the Americas, Dan Lawrence, who is our SVP and GM for the Americas, and John Haarer, who has joined as GM for Asia Pacific and Japan, and Raja Agrawal, our VP for the Middle East.
Thanks, Mark. Another question that we have from the portal is saying that you emphasize the momentum in your software stack. Where are you seeing the most momentum across the stack today? Why are customers choosing Nebius? Roma, over to you.
Yeah. Thank you, Gili. I think it said so many times by different people that now is the time of inference, and we see the same. Inference is the fastest-growing segment, new segment, in our stack. We see a very lucrative place where Nebius is positioned. We have the winning combination with capacity and customers need scale. We have the strong software stack, and we invest in-house and with the new announced acquisitions to be on the top performance of supporting the most popular open source models and specialized models. We can provide the best total cost of ownership and like cost of tokens for our customers through the full stack optimization of the stack. Of course, we care a lot about the developer experience.
We think that, in a way, we combine the best from different worlds, of specialized inference platforms, the scale of AI specialized clouds, the scale of hyperscalers and specialization of AI specialized cloud. Token Factory is our primary inference product now, and we are seeing good product market fit. If you look on the next layer, on agentic, it's still to be defined what is the final shape of the product and who will be the winners. We expect that Nebius will play the same role of foundation for people to build at scale, and will provide the set of tools and platforms to optimize workloads in agentic world.
Thanks, Roman. We have a question on customer concentration. Mark, how do you think about concentration risk given how large your contracts are with Meta and Microsoft? What does the rest of your revenue base look like in terms of customer diversification?
Thank you, Gili. As a reminder, I think we say this over and over again, but I think it's important to recognize that our priority is our AI cloud business. As such, we are very intentional about how we are pairing these key strategic relationships with the likes of Meta and Microsoft with a diversified core of our AI cloud customer base. We do not take these big strategic deals lightly, only take them when we see terms favorable for our core mission. Again, serving our AI cloud business. We also very diligently capacity plan, we're always looking to add capacity to best serve our core AI cloud customers, from developers all the way through to enterprises.
Our AI Cloud business is experiencing strong traction across all of the products that we're offering, as well as customer segments and the verticals that we're chasing. The diversified AI Cloud book of business as well gives us both customer and use case visibility that helps to fuel our go-to-market and drives our pipeline and revenue diversification overall.
Thanks, Mark. We have a question from James Kisner at Water Tower Research. On the $2 billion investment from NVIDIA and expanded collaboration on inference and agentic software around Token Factory, what concrete deliverables should we expect over the next few quarters, and does the partnership affect the timing or scale of your Vera Rubin deployment in the second half of 2026? Andrey?
Okay, Gili. Thanks, James, for the question. First of all, the NVIDIA strategic investment is meaningful across several dimensions, beyond the $2 billion of equity and line of sight to 5 gigawatts of capacity commitment by the end of 2030 that we've done. It really deepens a multi-year partnership with our most important hardware supplier at the moment, when access to GPU supply is a competitive advantage, so to say. We gain differentiated supply chain certainty on the future Rubin, Vera CPUs and the network. We also have a close collaboration with NVIDIA for the design and early support of the future SKUs. As of today, this is Vera Rubin and Vera CPU platforms.
We are able actually to have a early deployment and support on our cloud platform as soon as they will be publicly available. Again, it reinforces our position as a preferred builder of AI infrastructure and aligns our roadmap with the NVIDIA product cycle, which is very critical for the price and the performance and the utilization and just leadership overall. We are also expanding our software integration. Our announcement around physical AI is one example, and we are very excited about our partnership driving vertical specific advancements. We are also partnering with them to build software for inference and agentic work, and just recently achieved NVIDIA Exemplar Cloud status on GB300 for training.
We are very much among the first cloud providers globally to receive for all the NVIDIA generation where this status is available. Yeah, that's it.
Thanks, Andrey. Mark, maybe this one for you on a question from the portal. Some of your competitors have mentioned they are sold out for most of 2026 and even into 2027. If you are future selling, how much of your future capacity is sold out for this year and next?
Thank you, Gili. First of all, we are sold out again in Q1, as we have for several quarters as demand continues to significantly exceed available capacity. The vast majority of capacity coming online over the next several quarters to 12 months is already under contract or earmarked for our AI cloud customers. We do retain a portion of capacity for self-service to serve those AI builders that Roman mentioned earlier, and then we proactively manage those allocations to keep the segment supplied as demand evolves. Separately, we are typically seeing 4 or more customers competing for every GPU we bring online. We have significant expansion plan for 2027, including Vera Rubin, and we'll start selling that capacity as we move into the second half of this year.
Thank you, Mark. We also have a question on U.S. data center opposition. Tom, can you touch on some of the political opposition here in the U.S. related to data center construction?
For sure, Julie. I mean, definitely this is a big topic. It's something that, you know, we pay a lot of attention to. But overall, I think what I would say is that the approach that we've taken so far we found to be quite effective. I would basically say there's a few sort of components of that approach and how we think about this. Number one, I think, you know, first of all, not all companies that build data centers build them the same way. We're not all alike, and I think you've heard kind of Andrey and team, you know, talk about how we build, the efficiencies that we're able to achieve, what we do around creative use, you know, interesting technological ways of heat reuse and so on and so forth.
We build very efficiently, very effectively, and I think that's an important part of our story and what we talk about when we, when we come into new regions. Of course, that's not enough. I think that, you know, the second thing is that we take a very transparent approach to what we do and how we talk about ourselves. I think that's not something that's necessarily universal in our industry, but it's right from the very beginning when we're, when we're looking at a site and we're engaging, it's very clear who we are. We engage very actively in communities and talking about what our plans are, what we do, how we build, how we contribute. You know, you can see us showing up at community town hall meetings or, you know.
I'm looking actually right now at Andrey Korolenko across the table in Amsterdam, who's just flown in from our event in Independence, Missouri, yesterday, where we were engaging with the local government and community. We try and just be very clear and transparent about what we do, how we do, and what the benefit that it brings. I think the last thing is that, look, when we come into a new region to build, we don't just build and then move on to the next city. These are long-term investments, therefore, we have to look at these relationships with communities as long-term partnerships and relationships.
We think very much beyond what we do in terms of the building, but where else we can contribute through it, whether it's through our Nebius Academy academic offerings, working with local universities, helping to train, reskill, retool, and so on. We view this very much holistically as a long-term partnership, and so far, we found that this approach resonates well. There's no room for complacency here, so you know, we continue to pay attention and make sure that we're doing the best we can to be a positive contributor to the local ecosystems.
This concludes today's call. Thank you everyone for joining. You may now disconnect.