The Nebius AI plant being built in Hüüru has drawn attention because of the company's historical ties to the Russian technology firm Yandex and the potential implications for Estonia's security. Nebius spokesperson Tom Blackwell told ERR that the company is a new enterprise with no connections to Russia and that Nebius is one of the most thoroughly vetted companies in the world.
What exactly will begin operating in Tallinn? What makes it actually an AI factory rather than simply a large data center?
The data centers we are building are specifically designed to service AI. In the past, you had generic storage clouds with one type of infrastructure, but the cloud infrastructure needed for AI is fundamentally new. Therefore, everything we build is designed to service exclusively the global and European AI industry. This ranges from AI startups and natives to scaleups and enterprise customers.
Why did you choose Estonia over, say, Finland, Sweden or another country with maybe cheaper electricity?
We are scaling up very quickly. As you might know, we launched this business just over a couple of years ago, and we are already talking about gigawatts of potential scale that we are building out across the world. While we look globally for our expansion, when choosing locations, the availability of power is essential. More importantly, we look at where we see potential for a thriving AI ecosystem, because you want to build where the industry and your customers are.
We are very big fans of what Estonia is doing to build up its local AI and tech ecosystem. For us, the availability of power, as well as the existence of a vibrant and high-potential ecosystem, makes a lot of sense for us to come to Estonia, and we are very excited.
How much money is Nebius investing in Estonia, and how much is being invested by your local partners here?
We haven't disclosed the exact investment amount for this project, but generally speaking, we are talking about multi-billion euro investments when these types of projects reach full-scale deployment. These are sizable investments. On the one hand, you have the direct investment into the facility, chips, and hardware. On the other hand, there is a broader economic impact because these projects create jobs and fuel development in the wider AI and tech ecosystem. The economic impact can be quite significant and beneficial to the local markets where we build.
But what are we talking about in a one to two-year perspective?
What we talked about yesterday is that the initial phase of this is bringing 22 megawatts online by the end of this year. That is step one, and that is what we have talked about up until now. Typically, when we start investing, we look at what we can build in the short term, but we also like to have a trajectory to expand in the years to come. For example, one of our first facilities was a similar-sized one just outside of Helsinki, but we have already expanded several times beyond that initial building in Finland. When we start investing, we like to see that there is potential for us to continue to scale and ramp up.
What does Estonia actually gain from this project? How many permanent jobs are we talking about, and how much tax revenue will it create?
Usually with these projects, if you look at it in a direct sense, you are talking about hundreds of jobs connected to the build-out and ongoing operations. However, what is harder to quantify, but equally important to understand, is the broader impact. Having access to this type of cloud infrastructure can very much support the local startup scene. These are growing companies, and if you look at a global scale, access to this kind of computing is extremely scarce. You have tens of thousands of companies around the world fighting for access to this, so having local infrastructure in Estonia is something that can greatly benefit the domestic AI scene.
How will local companies, researchers, and universities be able to access the computing power? Will they have dedicated resources reserved for them, or will the facility mainly serve large international customers?
We are building a global infrastructure footprint. As we build this out, we establish locations like Estonia to serve a broad region in Europe. Within Europe for example, we are established in Estonia, Finland, Iceland, France, the UK, also in the US, and potentially we will be expanding into Asia later in the year. On the other hand, this is something that can serve the global AI industry. Actually, one of the reasons we choose to invest in locations with a vibrant domestic ecosystem is because proximity to infrastructure makes a difference, particularly with some of these AI workloads.
We will always prioritize where we see the development of the local ecosystem, because we know there are benefits to accessing infrastructure that is domestic, onshore, and within sovereign territory. Ultimately, if you are an Estonian startup, having infrastructure that is close by and in-country offers many benefits. We believe this will be of great benefit to the domestic industry.
Who are your main customers? Who are you focusing on serving from the Tallinn facility?
If you look at it at a global level, we effectively have two main types of customers. First, there is the global AI startup world. These can be venture capital-funded companies with 10 or 20 million, just getting started on working with models. The second big category is large enterprise customers. These are more of your household names, be it financial institutions like Revolut, or healthcare and life science companies. Those are the two main broad categories we are building for into the future. We also have a sub-segment of large big tech companies; for example, we have large contracts with Microsoft and Meta. We look at those types of contracts as sources of funding to drive our core business, which is a multi-tenant AI cloud designed to service hundreds of thousands of startups and enterprise customers around the world.
We are very happy to be building in Estonia and Europe. While the US might currently be ahead in the AI startup space globally, Estonia is actually one of the standout countries in Europe in terms of its local startup scene. However, we believe the balance will change in enterprise adoption. There is a massive opportunity for Europe, and Estonia as well, to really be among the pioneers in adoption. When we look at the future, we are really building for your household names: banks, healthcare companies, life science companies, and research institutes. They represent the real future of AI adoption. For those types of companies, having infrastructure they can access close by, domestically, or onshore makes a big difference.
The facility will obviously consume a considerable amount of electricity. How concerned are you about the current state of Estonian electricity production? We have quite a few projects that are delayed, and the renewable energy uptake is not going as fast as perhaps hoped and promised.
By the time we make a decision and get to the stage of announcing a project, we have already done a lot of research, preparation, and due diligence to ensure a clear path for bringing these cloud computing services online. One of the important components is making sure we feel comfortable with how to power it. We look at doing this in different ways, whether that means connecting to local grids or bringing in our own innovative energy solutions.
A couple of things are important to us as we assess this. Number one, wherever it is possible to grow more towards renewable energy, we do so. We also pay attention to the general supply of power, because it is extremely important that there is no adverse impact on residents in terms of pricing or access. For example, at one of our facilities in Finland, just outside of Mäntsälä — which is where we actually started — we work very closely with the local community and utilities to make sure we are properly sourcing energy, so that there will be no adverse impact.
One of the innovations at that site is that we are able to capture the heat generated by the facility and bring it back into the local district heating system, which actually brings the bills down rather than up for the local communities. We pay very close attention to make sure that we have a sustainable supply and this is something that can contribute positively to the wider community where we are building.
Is there also a clear plan on how to solve that in Tallinn?
Exactly. As I said, by the time we confirm these projects, all of that is part of the preliminary work we do. We feel comfortable that we will be able to build here in the same way we do elsewhere and maintain sustainable energy and powering of the facility.
Given Nebius's history with Yandex, how would you address concerns that Estonians may have about the company's independence from Russia today?
I wouldn't say that Nebius has a history with Yandex. Nebius doesn't do anything in Russia and won't operate in Russia. When we launched this business just a couple of years ago, one of our tremendous assets was Arkady [Volozh], the founder, and several hundred of his top engineering talent who came with him. They are now based in Amsterdam, across Europe, and some in the US.
We have amazing talent, and they are some of the most sought-after professionals in the global AI industry. These are people who, on any given day, could walk into a job at a Silicon Valley startup or big tech company. We are very proud to have this kind of engineering talent, which in some way serves as the basis for what we are building. Otherwise, Nebius is a completely new company.
We are based in Amsterdam and listed on Nasdaq. Some of our big shareholders are Nvidia, Accel, and others. We are really operating alongside the top cloud players in the world, like Google Cloud Platform, Amazon Web Services, Azure, and others. In Europe, we are probably the only European player operating at a scale that is moving very rapidly towards the large tech players in the cloud space.
Have you been in contact with Estonian security authorities? Have they asked questions about the background of some of the employees of the company and also the main shareholder?
Since we listed on Nasdaq just over a couple of years ago, we have probably been one of the most vetted companies in the world. As we build out across Europe — in Estonia, Finland, the UK, and the US — people obviously need to feel very good about the company. Because we are listed on Nasdaq, our shareholding structure is completely clear and transparent to anyone. We are principally US and European owned, and our customers are mostly from the US and Europe.
We are potentially going to expand into parts of the Asia-Pacific region before the end of the year. Suffice to say, if there were concerns about us, it would be very difficult to build a business working with some of the largest, security-conscious companies in the world. 20 billion dollar deals with Microsoft, Meta, and others are hard to come by if there are security concerns.
Last thing. Russian military hackers have reportedly used services connected to Nebius infrastructure. What happened? What can you tell me about that?
I believe that is nonsense. I have never heard anything about that, and I certainly believe it is not true.
-- Editor: Anna Gerda Nurmetalo, Argo Ideon