An extraordinary story underlies the company that will build Israel's supercomputer. Just a year old, and virtually unknown, Nebius (Nasdaq: NBIS) employs dozens of engineers in Tel Aviv and is considered a key Nvidia partner. Its founding team includes several senior figures who previously held top roles at Yandex, (often referred to as "the Russian Google"). After leaving Russia with a fraction of their holdings in the wake of the war with Ukraine, they had to start over from scratch. This decision turned into a Cinderella story, with a 380% jump in share price in less than a year.
Let's go back to March 2022, when the sky fell on Yandex founder Arkady Volozh and the company's number two, Roman Chernin. Russian President Vladimir Putin launched the invasion of Ukraine, and in response, the West boycotted Russian gas, oil, and technology companies, and imposed personal sanctions on their executives. Trading in Yandex shares on Nasdaq and the German stock exchange was frozen, and the European Union imposed sanctions on the head of the company's news department, Tigran Khudaverdyan, for promoting Russian propaganda, and then on Volozh, who is Russian-Jewish with Israeli and Maltese citizenship. In the background, claims surfaced that the Russian government collects information on its citizens through Yandex's delivery and taxi hailing services, Yango Delivery and Yango Taxi.
Three months after the outbreak of the war, in June 2022, Volozh, who had lived in Israel since the invasion of the Crimean Peninsula in 2014, decided to resign. Since then, he has been battling to clear his name, he set about distancing himself from the company he founded more than 20 years earlier. Chernin, his deputy, was abroad when the war broke out. Although he was not sanctioned, he also made his way to Israel as quickly as possible, and left his prestigious position behind.
It was clear that the story between the Kremlin and Yandex executives - mostly Russian-born Jews who never mingled much in oligarchic circles - had come to an end. From that moment on, Volozh, Chernin, software infrastructure engineer Andrey Korolenko, their co-managing partner Elena Bunina, and others, focused on a single task: selling their shares in Yandex, which also had extensive global operations and offices in Amsterdam and Tel Aviv, and setting out in a new direction.
"We were working on projects and products, and suddenly we had to leave. It's a kind of trauma," Chernin says in an exclusive "Globes" interview. "We knew we wanted to build something new, based on capabilities that had been proven in the past, but we didn't know if there would be demand for it. It was very frustrating."
Moscow’s rules
Volozh, who lives in Tel Aviv’s Neve Tzedek neighborhood, began negotiations with the Kremlin on dismantling his company. It was clear that Putin would have the upper hand and that Volozh would lose billions.
The government sought to keep the majority of the company's business for itself. A group of Kremlin-associated businessmen bought the world's fourth-largest search engine, the news and map service, the delivery and taxi services, as well as the successful cloud service Yandex Cloud, which until then was considered one of the best in the world. Volozh and Chernin came out with what they considered crumbs: the large data center in Finland, and the huge offices in Tel Aviv and Amsterdam, the Nasdaq ticker symbol, and some marginal activities that until then accounted for only 5% of Yandex's revenue, including some of the cloud business, delivery robots, still-in-development autonomous taxis, the Toloka code-sharing platform and algorithms, and a training initiative for engineers.
The Kremlin agreed to pay Volozh for his team and the former European operations just $5 billion. That was half Yandex's fair value at the time of the split in early 2024, but it was the price of freedom.
But the former Yandex executives had one card that Russia did not consider: the company’s talents. Hundreds immediately fled to Armenia, Georgia, Kazakhstan, and the United Arab Emirates, with many ending up in Israel and Europe. Volozh and Chernin assisted them in securing visas to work in the Netherlands or permits to immigrate to Israel, as well as in finding housing, educational frameworks for their children, and, of course, employment in the new company they founded - Nebius, meaning "cloud" in Latin - a new name, far removed from any Russian connotation.
Still, the market found it difficult to embrace Nebius, viewing it as a kind of second Yandex. Italian Prime Minister Giorgia Meloni refused to approve work visas for the company's employees, so plans for acquiring a local company to establish a main office in Italy were shelved. Some workers, who had already arrived in Milan and Rome, moved to Amsterdam following determined negotiations with the Dutch government, which eventually approved their visas. The rest settled in Israel, most by virtue of the Law of Return, as they had Jewish backgrounds. Thanks to Volozh's good relations with the Israeli government, many non-Jews also received residence visas and work permits.
The company is managed from Amsterdam, where the company's headquarters are located, but a significant portion of the management is located in the development center in Tel Aviv, where CEO Volozh lives. Chernin, a co-founder of the company and its first VP of sales, divides his life between the two cities, but spends a great deal of his time commuting between Europe and the US. The Israeli branch is managed by Ophir Nave, previously a lead partner at the Israeli law firm Arnon, Tadmor-Levy, and currently COO at Nebius, as well as a member of its board of directors.
Another senior official who settled here is Bunina, who managed Yandex from 2017 until February 2022. Shortly after the invasion of Ukraine and the imposition of sanctions, she packed her belongings and arrived in Israel via Cyprus with her husband and four children. Bunina, who holds a doctorate in physics and mathematics, is not involved in the day-to-day running of the company. She manages educational projects at the company and lectures in mathematics at Bar Ilan University.
The Amsterdam operations are managed by Korolenko and Danila Shtan, the two technological minds responsible for the development of Yandex's cloud and AI infrastructures. US operations are managed by recently appointed Chief Revenue Officer Marc Boroditsky, formerly of tech giants Oracle, Twilio and Cloudflare.
"Nvidia was there for us"
A tour of the company's offices in Tel Aviv or Amsterdam will reveal that most employees are young Russian-speakers in their 20s and 30s, mostly new immigrants, approximately half of them from Yandex.
"We had a large engineering team - we already had people in Europe and Israel, with marketing in the US - but we had to build everything from the ground up," says Chernin. Although many came from the founding team of Yandex's cloud service, Chernin, who hosts us on the company's glittering offices in Tel Aviv’s Alon Towers, emphasizes: "This technology was built from scratch."
Nebius has become one of Nvidia's most prominent growth engines over the past year. This happened not only thanks to the team’s cohesion, experience, and the presence of some of the sharpest minds in infrastructure and software who had emigrated from Russia to the West, but also because the company itself was actively seeking a new direction at a defining moment in history. "Our jaws dropped in November 2022, when OpenAI launched ChatGPT. Everyone understood it, but as someone who came from Yandex and knew the potential of AI, it was an unforgettable day," says Chernin.
"We made the decision to build an AI-driven product at an executive workshop we held six months later, in March 2023. We ordered GPUs and set out. Nvidia was there for us."
Today, a year after the company was officially re-established, and a year and a half after the sanctions on Volozh were lifted, Nebius has become the perfect restart for Volozh, Chernin, Bunina and the other executives. At the same time, it is bringing in investment from giants like Nvidia, Accel, and Bezos Expedition (Jeff Bezos’s investment arm became a lead investor in Nebius subsidiary Toloka), to acquire and finance the purchase of tens of thousands of GPUs. Last year, the company's shares began to be traded via the stock exchange shell in which the Yandex was previously traded, after having been frozen three years ago. It has rapidly emerged as an alternative to high-priced AI shares, drawing positive attention from an enthusiastic analyst community.
Many analysts see Nebius as a growing alternative to CoreWeave, the neo-cloud company that became one of the year’s most intriguing technology offerings. Within the emerging ‘neo-cloud’ model, large and mid-sized companies rent AI processing clusters- dedicated software used to train their own language models. However, while CoreWeave's stock has fallen by 28% in the past month, Nebius has risen by 35% and now has a market cap approaching $17 billion.
Last week, Nebius completed its winning streak by announcing its second quarter revenue: $105 million, a jump of no less than 625% in comparison with the same quarter last year. At this annual revenue rate, the company is on track to close the year with an estimated $1 billion in revenue-reflecting a sharp increase in demand for its services: AI server rentals for medium and large enterprises, as well as for governments seeking to train and operate language models in a secure environment.
In October 2024, more than six months after sanctions were lifted on Volozh and the split from Yandex was completed, the company's shares were allowed to return to trading, this time under the ticker symbol NBIS. The company was thoroughly vetted by the US Securities and Exchange Commission, and after it announced a private investment in public equity (PIPE) round of $700 million from Nvidia and Accel, the stock was launched and has since risen by about 380%. During the same period, Nvidia's stock rose by only about 38%.
The consensus on Nebius is positive: Six out of seven leading analysts recommend buying at this stage, and only one maintains a neutral recommendation. None recommends selling - the expectation is that the stock will rise to $90 in about a year, compared with less than $70 today. Last month, when the stock was at $46, Goldman Sachs published a buy recommendation with a target price of $68. As this article went to press, the company's share price stood at $69. Investment bank D.A. Davidson also raised its target to $75, in the wake of the second quarter performance.
"Why choose Nebius?"
But there are other opinions as well. Seeking Alpha analyst Danil Sereda argues that the company is traded at a multiplier that is too high in comparison with its competitors, and argues that most of the growth potential is already priced into the stock, which has been in high demand because of its exposure to AI infrastructure and Nvidia. Sereda notes there is a lack of overlap between the rate of revenue increase and the slower increase in revenue forecasts, that growth is limited by the pace of building a server farm and the number of GPUs allocated to it by Nvidia, and that Nebius is operating in a competitive market against other neo-cloud companies, as well as large AI service providers such as Amazon, Microsoft, and Google.
Chernin himself agrees with the assumption that CoreWeave is the main competitor at present, and says, "In the long run, our competition will be with Google, Microsoft, Oracle and Amazon. Ninety percent of the demand is driven by startups - emerging and rapidly growing companies - be they OpenAI, Lovable or Cursor. Any of these startups could quickly develop into a large enterprise. This is the new generation of tech giants, these are real companies that will become revenue machines and will need a lot of AI processing."
But Chernin is looking in other directions as well. "I believe that even the major companies that were founded before the AI era, such as Samsung, eBay, Uber, Wix and DoorDash, will see how much AI will help their business. And after they acquire AI services, we’ll be able to help them with cyber products, integration, development tools, and agent systems, and we’ll be able to compete with the Googles and Microsofts of the world from the other side.
"Why not go to Google or Microsoft? Because we live in a world that is aware of the competition and where companies don't want to depend on one platform. Do you want to live in a world ruled by two or three AI empires? The world will be better if we have more options." And why choose Nebius? "We believe we have the best access to talent on this side of the Atlantic."
Chernin emphasizes what makes Nebius unique, saying, "Most of their cloud partners are engaged in building physical infrastructures, they build, lease or deploy AI clusters and operate them. In addition to everything else, we are also a software company, thanks to the many software people who came to us from Yandex, people who bring with them years of experience in software infrastructures and user interfaces. We are among the only ones who believe in building all of this - hardware, software, and other services. Think of us as a kind of Google or Amazon for AI."
Moshe Zilberstein, general partner at Next47, which invests in companies in the AI and software infrastructure sectors, says, "Neo-cloud companies have a reputation for being able to deliver graphics processors quickly and reliably to customers, even though in practice tech giants such as Microsoft, Google or Amazon can provide similar services - and the proof is that OpenAI chose to acquire an AI cluster specifically from CoreWeave.
"We are in a world in which the demand for graphics processors is higher than the supply, and there is apparently enough room for all these companies - but remember that only a few companies consume graphics processors all day, all week, and this can affect the market growth forecasts."
From first client to supercomputer
Only a year ago, Nebius signed its first customer, operating from its established data center in Finland, which offered just 20 megawatts of AI processing capacity - an asset inherited from Yandex. Today, the company processes about 400 megawatts of AI at four additional server farms in Iceland, France, and two in New Jersey, and Kansas. In the next two months, facilities will also be launched in the United Kingdom and Israel.
The Netherlands and the European Union have embraced the Israeli-Dutch company, viewing it as a local growth engine and Nvidia's best partner in the region. About a year ago, Nebius promised to invest more than $1 billion in AI infrastructure in Europe this year. In an interview with Dutch media, the company confirmed the goal had been achieved, and with good reason: it started out with capital of $2.6 billion and an additional $700 million raised privately.
However, Nebius expects the bulk of its growth to come from the US, where most of its customers-primarily small startups and mid-sized companies-are located, and where favorable regulation is driving demand and supporting the construction of new data centers. For this market, Nebius is currently building its largest server farm- one of the largest currently being built to provide AI services - with an output of up to 300 megawatts.
In Israel, the company is building a large server farm in Modiin at a facility owned by Mega DC of the Mega Or Group, at an investment of half a billion shekels. The facility, which will rent out AI services, will have 4,000 Blackwell (B200) graphics processors; it was this capacity that won Nebius the government tender, conducted by the Israel Innovation Authority, for construction of what is being termed "Israel's supercomputer." The supercomputer - in practice, about 1,000 of the 4,000 graphics processors connected by high-speed servers - will be constructed with NIS 160 million in state funding. It will enable government ministries, academic researchers, or startups to run chatbot queries or train a sovereign language model, which ostensibly will be protected from cyber manipulation.
The national supercomputer has been criticized for being too little, too late - 1,000 graphics processors will not be enough for all AI processing requirements. Earlier this month, the Nagel Committee review of national AI strategy, recommended establishing a server farm with at least 16,000 processors. This followed a harsh report by the State Comptroller, which determined that national AI policy had failed.
"I don’t believe Israel has missed out on AI," Chernin says, responding to criticism that the country is not among the leaders in training AI researchers, building server farms, or exporting language models. "Israel doesn’t necessarily need to be a language model exporter - high-quality open-source models are already widely available. And we don’t need to network the entire country to a 5-gigawatt server farm; there’s no need to copy the Emirates model. Israel can be well served with far less. We built a large facility here not only to meet strong local demand, but also because we expect customers from abroad to use it. What we are building today in Israel will not remain as it is; we already see clear indications of high demand."
Published by Globes, Israel business news - en.globes.co.il - on August 31, 2025.
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