The Race for AI Infrastructure: How Nebius is Scaling Power Capacity Against Rising Competition

The artificial intelligence infrastructure market has entered a critical phase where data center capacity has become the ultimate growth bottleneck. Nebius Group N.V. (NBIS) is positioning itself as a key player in this space by aggressively scaling its power infrastructure, but the competition from tech giants and specialized cloud providers is intensifying. The company’s success will ultimately depend on whether it can execute its ambitious expansion plans while managing execution risks in an increasingly crowded landscape.

From Bottleneck to Competitive Edge: Nebius’ Power Scaling Strategy

The demand for AI compute infrastructure remains insatiable, but the supply side is where real differentiation happens. Nebius has identified that securing long-term power capacity is more critical than facilities themselves. The company has already contracted substantial power commitments that provide clear visibility into its growth runway.

By targeting 2.5 gigawatts of contracted power by 2026—up from an earlier 1 gigawatt projection—Nebius is doubling down on securing resources ahead of actual deployment. The company plans to have 800 megawatts to 1 gigawatt of fully built and operational data center capacity by the end of 2026. This approach transforms a typical execution challenge into a competitive advantage: much of the upcoming capacity is essentially presold, with customer commitments locked in before facilities even go live.

Recent launches demonstrate this strategy in action. In Q3 2025, Nebius opened data centers in Israel equipped with B200 GPUs and in the U.K. with B300s, with strong presale demand. The upcoming deployment of GB300s signals continued evolution of its fleet. For 2026, expansion will accelerate across existing hubs in the U.K., Israel, and New Jersey, while new facilities across the United States and Europe are expected to come online in the first half of the year.

Global Expansion with an Eye on Emerging Markets

Interestingly, while Nebius focuses on established data center regions, emerging markets like India represent an untapped frontier for AI infrastructure investors. The global race for data center capacity extends far beyond North America and Europe. Several industry observers expect significant growth in data center stocks in India as companies recognize the operational cost advantages and strategic importance of establishing AI infrastructure footprints across diverse geographies. Nebius’ current expansion footprint, while comprehensive, may face competition from providers specifically targeting emerging market opportunities.

The Competitive Gauntlet: CoreWeave and Microsoft’s Aggressive Plays

Nebius doesn’t operate in isolation. CoreWeave has expanded its active power footprint to roughly 590 megawatts in Q3, with contracted capacity reaching approximately 2.9 gigawatts. The company grew revenues 134% year-over-year but revised 2025 guidance downward to $5.05–$5.15 billion (from $5.15–$5.35 billion) due to supply constraints and execution delays. CoreWeave’s diversified provider strategy—ensuring no single partner exceeds 20% of capacity—shows how specialized infrastructure players are building resilience.

Microsoft presents a different challenge. The tech giant plans to boost total AI capacity by more than 80% in 2025 and roughly double its overall data center footprint over two years. Fairwater, Microsoft’s Wisconsin facility, will scale to two gigawatts and launch next year. Microsoft has deployed the first large-scale cluster of NVIDIA GB300s and is building a fleet spanning the entire AI lifecycle. However, even Microsoft expects to remain capacity-constrained through fiscal 2026, with demand outpacing buildout.

This supply-demand gap creates both opportunity and pressure for Nebius. The company’s contracted power visibility provides an advantage, but scaling multiple data centers across regions simultaneously carries inherent execution risk. Adding to the pressure: macroeconomic uncertainty, rising operational costs, and substantial capital requirements.

Financial Targets and Market Valuation Questions

Nebius is targeting $7–$9 billion in annual recurring revenue by 2026, a significant leap from current levels. Shares have gained 213% over the past year, substantially outpacing the Internet Software Services industry’s 29.4% gain. However, valuation metrics raise questions: the stock trades at 5.04X Price/Book, higher than the industry median of 3.92X, suggesting premium pricing.

Recent analyst activity shows downward revisions to 2025 earnings estimates, a potential warning sign given the company’s aggressive capital spending and execution requirements.

The Bottom Line: Execution Will Determine Dominance

Nebius has articulated a compelling strategy: secure power first, build capacity second, presell whenever possible. The contracted pipeline and global expansion plans position the company as a serious contender in AI infrastructure. However, in a market where capacity constraints drive growth but competition intensifies on multiple fronts, sustained execution becomes everything. The company’s ability to deliver on timelines, maintain cost discipline, and secure further power allocations will determine whether it maintains its current growth trajectory or faces margin pressure from better-capitalized competitors with established customer relationships.