CoreWeave and Nebius Show the High Cost of Winning the AI Cloud Race

CoreWeave, the AI infrastructure provider, reported $2.575 billion in second-quarter revenue, up 112% from a year earlier, and ended the quarter with $104.2 billion in revenue backlog. Nebius reported $582.3 million in revenue, up 454%, and $285.7 million in adjusted EBITDA from its AI cloud business. The infrastructure behind that growth requires substantial capital. CoreWeave spent about $9.4 billion on capital expenditures during Q2, while Nebius invested about $5.7 billion in property, equipment and intangible assets. The Contracts Are Getting Bigger Nebius closed four major AI cloud deals during Q2, with an average total contract value above $1 billion. The contracts carried annual contract value of $20 million to $25 million per megawatt, compared with a $12 million base for its 2026 contracts. Prices for older-generation GPUs were more than 30% higher in Q2 than in Q1, according to Nebius. The company also reported higher pricing for newer-generation GPU capacity. CoreWeave's backlog reached $104.2 billion at the end of June. The figure includes remaining performance obligations and other contracted revenue that the company expects to recognize as it delivers services under customer agreements. Nebius said most of its Q2 contracts are expected to contribute primarily to 2027 revenue as new capacity comes online. New Capacity Is Carrying Better Economics CoreWeave said newly signed contracts carried expected contribution margins five to 10 percentage points higher than contracts signed in recent quarters. It also implemented an approximately 25% price increase across its stock-keeping units in July. Nebius reported that the expected payback period for its Q2 deals was one year and 10 months, compared with a historical range of two to three years. Its AI cloud business produced a 49.7% adjusted EBITDA margin during the quarter. Nebius reported a $190.4 million group net loss in Q2. CoreWeave reported a $626 million net loss and $640 million in interest expense. Customers Are Helping Fund the Expansion About 70% of Nebius' Q2 deals included customer prepayments, covering 50% to 60% of the associated capital expenditure. The company expects more than $9 billion in customer prepayments during 2026. On July 17, Nebius disclosed its first senior secured debt facility, worth approximately $775 million. The facility is backed by deployed GPU infrastructure and contracted cash flows from an investment-grade customer, according to its SEC filing. CoreWeave also raised capital tied to its infrastructure during Q2, including a $3.1 billion delayed-draw term loan facility backed by high-performance computing infrastructure. Nebius said the July facility was backed by customer cash flows that, together with the financing, cover more than 100% of the capital expenditure required for the underlying GPU infrastructure. It also described the financing structure as applicable to more than $40 billion of additional customer commitments. Power Becomes Part of the Expansion CoreWeave ended Q2 with about 1.5 GW of active power and 3.7 GW of contracted power. It expects 2026 capital expenditures of $35 billion to $39 billion. Nebius raised its contracted-power target to 5 GW and plans to deploy more than 1 GW of new capacity annually beginning in 2027. The 5 GW figure refers to contracted power, so it is not directly comparable with CoreWeave's 1.5 GW of active power. On July 14, New York Governor Kathy Hochul signed an executive order creating a one-year moratorium on new hyperscale data centers while the state develops a regulatory framework covering energy demand, infrastructure and community impacts. For CoreWeave and Nebius, the figures reported in Q2 leave the next stage of the buildout tied to the delivery of contracted capacity. Both companies are planning further increases in computing infrastructure, with the associated requirements for capital and electricity disclosed alongside their growing customer commitments.

CoreWeave and Nebius Show the High Cost of Winning the AI Cloud Race

The Contracts Are Getting Bigger

New Capacity Is Carrying Better Economics

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