Former Yandex CEO Volozh returned with an AI infrastructure project after Russia broke up

Arkady Volozh, founder of Nebius and former CEO of Yandex, wants to make Nebius a major AI infrastructure company. Since a $5.4 billion deal freed the company from Russian ties, it can now focus on growth worldwide.

The founder of the new Dutch company Nebius, Arkady Volozh, who used to run the Russian tech giant Yandex, told Reuters that the company hopes to help lead the big push to build the infrastructure that will support AI.

On Monday, a group of Russian buyers completed a $5.4 billion cash and share deal to purchase Yandex’s Russia-based assets, owned by Nasdaq-listed Dutch parent company Yandex NV (YNV).

This was the biggest corporate exit since Russia invaded Ukraine in February 2022, though the price was much lower than expected.

Foreigners could no longer own shares in Russia’s biggest tech company after the deal. This significantly increased the likelihood of the Kremlin monitoring Russia’s internet space.

However, with its independence from Russia, YNV (now known as Nebius Group) was able to expand internationally.

Also, Volozh is free. In March, the EU lifted the sanctions against him that made him quit as CEO of Yandex in 2022.

“It’s good to be free, and it’s even better to be free with a couple of billion dollars to build something,” Volozh told Reuters.

It was his first public statement since August of last year when he became frustrated about the war and threatened to ruin the whole exit deal.

Volozh wants to build infrastructure on top of Nebius’ cloud platform to support the world’s AI industry, which is growing very quickly.

This infrastructure will include large GPU (graphics processing unit) clusters, cloud platforms, and developer tools and services.

“We hope Nebius will become one of the largest AI infrastructure companies in the world, certainly in Europe,” Volozh told. “We understand that something serious is coming, which probably happens once a generation, like the internet in the 1990s.”

Volozh would know, because he started Yandex during the dot-com boom. The company went public on Nasdaq and was worth as much as $30 billion at one point.

This year, the stock prices of Alphabet, Amazon, and Microsoft the “big three” in AI—have gone up thanks to bets on AI infrastructure.

Nebius now has YNV’s Nasdaq listing and hopes to start trading again soon after being shut down for a long time because of its Russian business.

It believes it could be the only publicly traded stock in AI infrastructure that isn’t part of Big Tech.

Nebius operates a data centre in Finland and internally designs hardware, utilizing over 1,000 engineers recruited from Russia during the war. The company hopes to break even in a few months and then grow because of the high demand.

Volozh said, “It’s a supply market now; whatever you build is pre-ordered months in advance.” If we can get this wave, it will be fun to ride.

Nebius has some extra cash after selling its Russian business for a low price. However, Nebius will use some of the deal’s proceeds to buy back shares from investors who still hold untraded Nasdaq stock.

Infrastructure is a Very Capital-Intensive Game

“Infrastructure is a very capital-intensive game,” Volozh said. We anticipate investing billions of dollars, with a portion coming from our funds and a portion from external funding such as debt or equity.

According to Volozh, the Finland data center will triple its capacity and add hundreds of megawatts of power in the upcoming year.

Because it has worked with Nvidia for a long time, Nebius has good access to GPUs. While the big players use Nvidia chips to make their models, Nebius gives smaller players a place to start.

Getting investors to believe in its future might be challenging, especially if Nasdaq trading starts up again, which Volozh hopes could happen as early as September.

Volozh said it was difficult to set a target share price because Nebius is a very different company from Yandex. He also said there would be no unpleasant feelings if investors decided to leave. “If someone wants to leave the train now while we are still in the station, they are welcome to do so,” he said.