TradingKey - On Monday, July 20, Eastern Time, Nvidia ( NVDA) filed a Schedule 13G with the U.S. Securities and Exchange Commission, disclosing a holding of AI cloud service provider Nebius Group ( NBIS) of approximately 9.3% of its Class A ordinary shares, representing 22,256,412 shares. Following the announcement, Nebius shares rose over 7% in pre-market trading on Tuesday. As of press time, Nebius was trading at approximately $194.45, up 6.48%.

[Source: Futu]

This holding is not a recent addition. The filing shows that the holding includes 1.1905 million ordinary shares previously reported by Nvidia in its 13F filings, as well as 21.0659 million shares convertible from a prepaid warrant. The warrant and the underlying shares are locked up until September 11, but because they can be exercised within 60 days after July 13, regulators require Nvidia to include the shares underlying the warrant in its beneficial ownership, bringing the ownership stake up to 9.3% from an estimated 8.3% in March.

This stake stems from a $2 billion investment plan announced by Nvidia on March 11, when Nvidia participated in Nebius's funding round at an effective price of $94.94 per share to support its data center expansion. The filing of Schedule 13G is a standard passive ownership declaration and does not mean that Nvidia is preparing to initiate an acquisition.

Headquartered in Amsterdam, Nebius was formerly spun off from the European business of Russian technology company Yandex. After becoming independently operated in 2024, it has focused on AI cloud infrastructure, providing GPU computing power leasing to companies training and running AI models. Unlike traditional cloud service providers, Nebius focuses on GPU-intensive workloads and plans to deploy over 5 gigawatts of computing capacity by the end of 2030, which means purchasing a large number of Nvidia processors.

For Nvidia, it acts as both a supplier and a shareholder to Nebius: Nvidia supplies GPUs to Nebius while holding its equity, earning hardware revenue while also sharing in the returns of its customer's future growth. Some market views suggest that such agreements blur the line between independent demand and supplier support, but Bank of America analysts estimate that these circular agreements will only account for 5% to 10% of the projected $5 trillion in AI spending by 2030.

On the same day, Wall Street investment bank Northland raised its price target for Nebius from $248 to $410 and maintained an 'Outperform' rating, expressing optimism about its market share growth in the AI-as-a-service market. In early July, AI startup Reflection signed a $1 billion computing agreement with Nebius, which includes access to Nvidia's latest chips.

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