Nebius Borrowed Against Microsoft and Meta to Build the Machine They Prepaid

Nebius tells investors it holds more than $40 billion of contracted revenue from investment-grade customers, and the contracts behind that number name two companies: Microsoft and Meta ¹. Microsoft signed first, in September 2025, for about $17.4 billion of dedicated capacity through 2031, growing to roughly $19.4 billion if it buys extras ¹. Meta added about $3 billion in November and $12 billion of dedicated capacity from early 2027, with up to $15 billion more payable only on clusters Nebius cannot sell to anyone else ¹. Count the firm parts and the two names cover about $32 billion, roughly four-fifths of the headline; count every "up to" and it is about $49 billion ¹.

The collateral is the same two names

The concentration is not just a revenue story; it is a balance sheet story. Chief financial officer Dado Alonso put it plainly on the August earnings call: "We currently have approximately $40 billion of committed backlog that we can borrow against↗" ¹. That borrowing base sits against a capex plan of $20 billion to $25 billion this year and trailing twelve-month free cash flow of minus $9.61 billion ².

The clock: 36% converts in two years

Only 36% of the $37.5 billion remaining performance obligations at June 30, about $13.5 billion, is expected to become revenue within 24 months ¹. The rest is the construction schedule. Second-quarter revenue↗ was $582.3 million, up 454%, with annualized run-rate revenue of $3.0 billion guided to $7 billion to $9 billion by December ². Hitting the midpoint means booking 2.3 times first-half revenue in the second half, and the Meta build on Nvidia's Vera Rubin platform is still unfinished, with discounted fees already promised for late delivery ¹.

The Meta backstop also runs backwards, by the same filing's wording: if AI demand eases and other customers pass on that cluster, Meta must buy more of it, making Nebius more concentrated, not less ¹.

What the multiple assumes

At 51 times trailing revenue↗, the stock prices a customer list far wider than the one on file ². The list is widening only slowly: four second-quarter contracts above $1 billion each, including model makers Reflection and Cohere, and unnamed customers at 24%, 21% and 14% of quarterly revenue ¹. Third-quarter results on November 10 test the math: revenue likely needs to clear $850 million and run-rate revenue should reach $4.5 billion to $5 billion to keep the year-end guide credible ². Until then, four-fifths of the collateral is still two names.