A New Beginning
Arkady Volozh, co-founder and former CEO of Yandex, describes his new venture Nebius as “like a startup because we are ‘starting up,’ but it’s an unusually big one.” Emerging from the remnants of Yandex, Nebius aims to become a major player in AI infrastructure in Europe, a journey sparked by a turbulent history and ambitious future plans.
The Yandex Implosion
Yandex, often dubbed the “Google of Russia,” was a complex entity. While Yandex LLC, founded in 1997, operated a multitude of services from search to transportation primarily in Russia, its parent company, Yandex N.V., was based in the Netherlands and went public on the Nasdaq in 2011. By late 2021, Yandex N.V. reached a market cap of $31 billion. However, the Russia-Ukraine conflict in 2022 led to sanctions that halted trading and pushed Yandex to sever its Russian ties.
In February, Yandex N.V. announced it would sell its Russian assets, valued at $5.4 billion, to a Russian consortium, retaining $2.5 billion in cash and the rest in shares. This fire sale was necessary due to a Russian mandate requiring a 50% discount for divestments involving “unfriendly” countries.
The Birth of Nebius
With the sale finalized, Yandex N.V. rebranded as Nebius AI, focusing on its AI cloud platform and other non-Russian assets. Nebius aims to compete with major cloud hyperscalers and GPU-as-a-service startups, like CoreWeave and Flex AI, positioning itself uniquely with its existing infrastructure outside Russia, including a data center in Finland.
AI Compute Demand
Nebius plans to triple the capacity of its Finnish data center, aiming for nearly 100 megawatts, and is negotiating new data center projects across Europe. Volozh emphasizes Nebius’s comprehensive control over its technology stack, from data centers to connectivity.
Public vs. Private
Nebius intends to regain its public company status, viewing it as essential for raising the significant capital needed for large-scale AI infrastructure. “Building infrastructure is the most capital-intensive thing,” Volozh explains, highlighting that the scale required can be more easily funded in the public market.
Talent and Experience
Nebius benefits from a deep talent pool, with about 1,000 of its 1,300 employees being engineers, many transitioning from Yandex. This experienced team is crucial for building AI infrastructure at scale. The company’s primary hub is now in Amsterdam, with other significant bases in Israel, the U.S., and Serbia, reflecting its diverse and global reach.
Overcoming Challenges
The journey to establish Nebius has been challenging. When the war broke out in 2022, many Yandex employees left Russia, with Volozh and his team supporting their relocation. Israel and the Netherlands played key roles in accepting these workers, allowing Nebius to build a strong international presence.
Future Prospects
Volozh, now based in Tel Aviv but constantly traveling, is optimistic about Nebius’s future. “I’ve never been so excited about the future,” he says, drawing parallels to Yandex’s growth. Nebius aims to leverage its significant starting capital and experienced team to build a leading AI infrastructure company in Europe.
Conclusion
From the ashes of Yandex, Nebius emerges with a bold vision to lead in AI compute. With substantial resources, a seasoned team, and strategic global positioning, Nebius is poised to make significant strides in the competitive AI landscape. As it rebuilds and expands, Nebius exemplifies resilience and innovation, setting a new course in the rapidly evolving world of AI technology.
Key Takeaways
- Yandex Transformation: Yandex N.V. rebrands to Nebius AI, focusing on AI infrastructure outside Russia.
- Strategic Partnerships: Collaborations with Nvidia and expansion plans across Europe.
- Experienced Team: A robust engineering team transitioning from Yandex.
- Future Growth: Ambitious plans to triple data center capacity and establish new facilities.
- Public Market Advantage: Aiming to raise significant capital as a public company.
Original article by TechCrunch can be found here.
