Skip to content
Welcome, thoughtbot's Giant Robots listeners!Start here
Data Centres: Boom and Backlash
8SEP

Auditors could not count Nebius's assets

5 min read
13:06UTC

Nebius Group raised $775m in July against deployed GPU infrastructure and a contracted cash flow from an unnamed investment-grade customer. Its own auditor had already found the controls counting that hardware ineffective.

IndustryDeveloping
Key takeaway

Nebius borrowed against hardware its auditor said the company could not reliably count.

Nebius Group, the Amsterdam-listed AI cloud operator, told shareholders on 12 August that it raised $775m in July in its first secured debt financing, priced at SOFR plus 2.50% (the Secured Overnight Financing Rate, the dollar benchmark that replaced Libor). The company's own wording is worth keeping intact: the vehicle is "backed by deployed GPU infrastructure and contracted cash flows from an agreement with an investment-grade customer"⁠1. Nebius does not name the customer, and names no lender, no arranger and no maturity date either. A lender's claim on repayment therefore rests on hardware and a contract that nobody outside Nebius can independently verify.

The qualification comes out of the same filing cabinet. Nebius's annual report for 2025, filed on 30 April, states that its "controls related to fixed assets were not adequately designed and were not operating effectively", specifically over depreciation start dates and "timely reconciliation around the asset count process", and that in consequence the company "were not able to rely on certain data and reports used in the accounting for fixed assets, including server and network equipment"⁠2. Its auditor, Reanda Audit & Assurance B.V. of Amsterdam, gave an unqualified opinion on the financial statements and an adverse opinion on internal control over financial reporting (ICFR, the formal assessment of whether a company's accounting controls actually work). Reanda did not qualify the numbers; it found the process that produced them ineffective.

Keep the finding at its real size. The weakness runs to when depreciation begins and whether the asset register can be relied on, not to capitalisation policy, valuation or impairment. Reanda attributes the judgement risk to "the rapid expansion of GPU-based server infrastructure, data center facilities, and related equipment"⁠3. It was unremediated at filing, with Nebius targeting the end of 2026 and stating it "cannot assure you" of that. Foreign issuers assess ICFR annually rather than quarterly, so 30 April remains the last word on record and the August results do not revisit it.

Two further layers fund the build. Roughly 70% of deals closed in the quarter carried prepayments covering 50-60% of the associated capital cost, a share counted by deal number rather than by value or capacity, and Nebius expects over $9bn of prepayments across 2026, an expectation rather than a contracted sum⁠4. On 11 March 2026 the company sold Nvidia a pre-funded warrant over 21,065,396 Class A shares for roughly $2.0bn at an exercise price of $0.0001, with proceeds earmarked in part for "the development and construction of greenfield data centers"⁠5. The supplier funds the buildings, the customers pay the capital cost before it is spent, and the hardware that results secures the loan.

Q2 revenue reached $582.3m, up 454% year on year, against capital expenditure of $5.7bn, and contracted power guidance rose to 5 GW by year-end from 4 GW in May⁠6. Nebius says Q2 terms cut the expected payback period on those deals to one year and ten months, from a historical two to three years; that figure is the company's own non-GAAP estimate (not calculated under standard accounting rules), built on its own forecast costs and explicitly including capacity not yet built⁠7. The filing says only that capacity was added in the UK, Estonia and Finland. DataCenterDynamics supplies the granularity: a second Mäntsälä site of up to 70 MW from 2027, taking Finland to 455 MW across three sites, and 22 MW at Hüüru west of Tallinn with Greenergy Data Centers⁠8. Dublin held 15% of west European capacity against London's 39% when we last measured that drift, and the Nordic and Baltic pull has not slackened. A developer accepting a British grid offer would now face Ofgem's proposed per-megawatt deposit. Money of the kind raised in July is what buys past terms like that.

Deep Analysis

In plain English

Nebius runs data centres full of the powerful computer chips that train AI systems. Instead of selling more shares in the company to raise money, it borrowed $775m and used its chips and a customer's future payments as security, the same way a homeowner might use their house as security for a mortgage. This matters because it is the first time Nebius has raised money this way. Borrowing against hardware and contracts, rather than selling equity, is generally cheaper for the company, but it also means lenders are betting the chips and the customer relationship hold their value.

Deep Analysis
Root Causes

Nebius's own deal terms explain why lenders would secure debt against GPU assets rather than require equity. Roughly 70% of its Q2 2026 deals by count carried customer prepayments covering 50 to 60% of capital cost, a structure that de-risks the collateral before a lender's claim is ever tested.

The wider structural driver is the maturing AI-infrastructure debt market itself. Once contracted, multi-year compute revenue is increasingly treated as bankable collateral, similar to how power-purchase agreements underpin project-finance debt in renewables, letting operators raise secured debt instead of diluting equity for every expansion.

What could happen next?
  • Risk

    Customer concentration in the pledged cash flows cannot be assessed while the investment-grade customer remains unnamed.

  • Precedent

    A tight SOFR plus 2.50% spread on GPU-collateralised debt may open the same financing route to other AI-infrastructure operators.

First Reported In

Update #13 · GPUs now collateral as Nebius borrows $775m

Nebius Group N.V.· 14 Aug 2026
Read original →
Different Perspectives
Mohsen Rezaei
Mohsen Rezaei
The senior Iranian security official and former IRGC commander told Press TV that US-linked technology infrastructure in the region could become a target if war resumes. He named the UAE and valued the assets at more than US$2 trillion, without a breakdown.
Mykhailo Shelemba
Mykhailo Shelemba
Datagroup's chief executive says the Kyiv data centre hit on the night of 18 to 19 October is beyond repair. Services continue from backup sites, and no staff were hurt.
Kristen Umstattd
Kristen Umstattd
The Loudoun supervisor voted against fast-tracking Amazon's rezoning of the Ashburn campus. She said there were no figures yet on homes, school or road costs.
Akishima residents' litigation group
Akishima residents' litigation group
The group formed on 18 October and plans to sue Nihon GLP by year-end to stop eight data-centre buildings. Its lawyers will argue rights to life, health, clean water and a natural environment after mediation failed in August.
Óscar López
Óscar López
Spain's Digital Transformation minister said on 22 October he could not confirm when the data-centre decree will be approved. He added that Google has always committed to investing in Spain.
Google
Google
Google said it would comply with LVV's order to stop preparatory works at Muhos and Kajaani until environmental assessments finish. A spokesperson conceded the company had fallen short.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.