Shares of Nebius (NBIS) dropped nearly 10% on Tuesday after the AI infrastructure company announced plans to raise $3.75 billion in convertible debt<\/strong>, even as it rides momentum from major partnerships with Meta Platforms (META) and Nvidia (NVDIA).<\/p>\n\n\n\n The company said it will issue $2 billion in notes due 2031<\/strong> and $1.75 billion due 2033<\/strong> to institutional investors. Proceeds will be used to fund aggressive expansion plans, including building new data centers and purchasing advanced AI chips. While the capital raise supports long-term growth, the use of convertible debt raised concerns among investors about potential dilution, contributing to the stock\u2019s decline.<\/p>\n\n\n\n The offering comes on the heels of two landmark deals totaling approximately $29 billion<\/strong>, which had driven Nebius shares up more than 30% over the past month. Earlier this week, Nebius signed a major agreement to supply Meta with $12 billion in computing capacity starting in 2027<\/strong>, while also committing an additional $15 billion in capacity<\/strong> over five years.<\/p>\n\n\n\n In a separate deal, Nvidia agreed to invest $2 billion<\/strong> in Nebius to support the deployment of more than five gigawatts of data center capacity by 2030. These agreements position Nebius as a key player in the rapidly expanding AI infrastructure market, often referred to as the \u201cneocloud\u201d sector.<\/p>\n\n\n\n Despite these strong fundamentals, the stock\u2019s pullback highlights the market\u2019s sensitivity to financing strategies, particularly in capital-intensive industries like AI infrastructure. Investors are balancing the company\u2019s long-term growth potential against near-term financial risks.<\/p>\n\n\n\n Meanwhile, Meta\u2019s growing demand for AI computing power continues to reshape the industry. The tech giant has forecast up to $135 billion in AI spending in 2026<\/strong> and plans to invest heavily in data centers and proprietary chips through its Superintelligence Labs.<\/p>\n\n\n\n As competition intensifies, Nebius\u2019s ability to scale infrastructure quickly could prove critical\u2014though its path forward may continue to involve significant capital raises that test investor confidence.<\/p>\n\n\n\n