Nebius Boosts Infrastructure Expansion With 1.2GW AI Factory Approval

Core Insights - Nebius Group N.V. (NBIS) has received approval from the Independence City Council for a Chapter 100 industrial development incentive plan for its AI factory campus, allowing the construction of a large-scale AI infrastructure project [1][10] Company Developments - The planned AI factory in Independence is expected to support a capacity of up to 1.2 gigawatts, marking it as Nebius' largest AI facility in the U.S. and a significant step in its expansion strategy [2][10] - The 400-acre campus is projected to create approximately 1,200 construction jobs and around 130 permanent high-tech positions once operational [3] - The facility will implement a closed-loop cooling system to maintain water usage similar to that of a typical office building and will not increase residential electricity rates [3] Financial Contributions and Community Engagement - Under the approved agreement, Nebius is expected to make Payments in Lieu of Taxes (PILOT) totaling over $650 million over 20 years to the city and local school districts [4] - The company has outlined community initiatives, including STEM and AI education programs, workforce development support, and a Community Engagement Panel for ongoing dialogue with residents [4] Infrastructure Expansion and Revenue Projections - Nebius is expanding its infrastructure aggressively, having secured over 2 gigawatts of contracted power and plans to exceed 3 gigawatts, with a target of delivering 800 megawatts to 1 gigawatt of data center capacity by the end of 2026 [5] - For 2026, Nebius anticipates revenue between $3 billion and $3.4 billion, with an annualized run-rate revenue target of $7 billion to $9 billion by year-end [5] Competitive Landscape - Competitor CoreWeave (CRWV) is also expanding its AI infrastructure, ending 2025 with over 850 megawatts of active power and contracting nearly 2 gigawatts of additional power [6] - Microsoft Corporation (MSFT) added nearly 1 gigawatt of data center capacity in Q2 of fiscal 2026, reflecting the rapid pace of infrastructure deployment in the AI sector [7][8] Market Performance - Shares of Nebius have increased by 52.6% over the past six months, contrasting with a 13.1% decline in the Internet – Software and Services industry [9] - Currently, NBIS shares are trading at a price/book ratio of 5.34X, higher than the industry average of 3.47X [11]