Nebius, a young AI company with a complex backstory, has been chosen to build Israel’s national AI supercomputer. The announcement comes as a surprise to many, given the company’s modest size and relatively recent formation.
While Nebius is officially headquartered in Amsterdam and trades on Nasdaq with an $8.3 billion valuation, its roots lie in Yandex—the former Russian tech giant once known as “Russia’s Google.”
From Yandex Legacy To Global Ambition
Nebius was created from the non-Russian parts of Yandex following a political and corporate split. After Russia invaded Ukraine, Yandex faced sanctions and was suspended from trading on Nasdaq. Co-founder Arkady Volozh, who had moved to Israel before the pandemic, publicly condemned the invasion. In response, the Kremlin pushed to take over Yandex.
A deal was reached at the end of 2024. Kremlin-linked investors bought the Russian operations for $2.4 billion, while Volozh kept the international cloud and AI divisions under a new name—Nebius.
Volozh, now CEO of Nebius, promised to invest $1 billion in AI and cloud infrastructure. Since then, Nebius has spent hundreds of millions of dollars building data centers in Finland, France, and the U.S.
A Strategic Win For Nebius
Winning the Israeli supercomputing contract is the company’s first major public deal. It reflects growing confidence in Nebius’s capabilities, even though the company reported less than $200 million in revenue last year and is not yet profitable.
Before its return to Nasdaq, Nebius raised $700 million in a private funding round led by Nvidia. Last week, Jeff Bezos invested in Toloka, Nebius’s AI subsidiary.
Political Distance And Technical Credibility
Though he made his fortune in Russia, Volozh has distanced himself from the Kremlin. Alongside the late Ilya Segalovich, he helped build Yandex into a $30 billion tech empire. But tensions with the Russian government increased over control of user data and news content, especially involving services like Yango, which still operates in Israel.
Now, Nebius is trying to redefine itself as a neutral, innovation-focused firm based in Europe and led by Israeli citizens.
The Israel Innovation Authority’s decision to choose Nebius signals that the country is ready to bet on that new identity.
