By Alexander Marrow
(Reuters) – After almost two years of negotiations, a deal to split Russian tech giant Yandex’s assets was completed this week, with most revenue-generating businesses staying in Russia and former CEO Arkady Volozh returning to lead a new AI-focused group abroad.
Dutch firm Nebius, founded by Volozh and headquartered in Amsterdam, hopes to tap into the burgeoning need for infrastructure that underpins global AI ambitions, while Yandex will develop its existing services independently in Russia.
Here’s what we know about Volozh and the businesses:
ARKADY VOLOZH
Once the darling of Russia’s internet scene, Volozh co-founded Yandex in 1997 during the global dotcom boom, ultimately creating a company that would dominate Russia’s online search market, list successfully on Nasdaq and at one point reach a market capitalisation of around $30 billion.
When mathematician Volozh and geophysicist Ilya Segalovich launched Yandex, it had revenue of under $100,000.
Volozh left Russia in 2014 and settled in Israel, recognising that some services, such as self-driving cars, could be better developed overseas.
After 25 years as Yandex CEO, he stepped down in June 2022 after being sanctioned by the European Union over Russia’s invasion of Ukraine. Those sanctions were lifted in March 2024.
He faced criticism for not speaking out sooner and more forcefully against Russia’s actions in Ukraine. In August 2023, he condemned the invasion as “barbaric” and described himself as a “Kazakhstan-born, Israeli tech entrepreneur”.
His criticism of the war earned him a personal name check from President Vladimir Putin, a greater threat to his security and the risk of the $5.4-billion split deal being derailed.
NEBIUS GROUP
On Tuesday, Volozh unveiled Nebius Group, which he hopes will become a leading European provider of infrastructure and services to AI developers worldwide.
The company has more than 1,000 AI engineers with experience building AI infrastructure, as well as a data centre in Finland. The company plans to build hundreds of megawatts of capacity to service clients developing AI solutions.
Additionally, the group includes data partner Toloka AI, education technology business TripleTen and self-driving unit Avride, based in Austin, Texas. For those businesses, Nebius may seek external investment.
Nebius has total cash of around $2.5 billion and no debt, following the split from Yandex. It also takes on Yandex’s Nasdaq listing and hopes trading will resume there later this year.
“Over the next six to nine months we believe Nebius can achieve ARR (annual recurring revenue) of about $200 million,” Nebius said.
YANDEX IN RUSSIA
Yandex is now owned by a consortium of Russian investors, giving the Kremlin the potential for better-than-ever control over Russia’s internet space.
Yandex was bought by a consortium made up of senior Yandex Russian management, a fund controlled by oil major Lukoil and three other companies owned by businessmen Alexander Chachava, Pavel Prass and Alexander Ryazanov.
The new owners acquired it at a huge discount, thanks to Moscow squeezing funds from exiting foreign companies.
Often dubbed “Russia’s Google”, Yandex became the leading player in online advertising in Russia and developed other services, including ride-hailing, food delivery, e-commerce, cloud and AI ventures of its own.
Some Yandex services are available in other markets, but how widely it can expand internationally remains to be seen, given Russia’s pariah status in the West.
Trading in Yandex in Russia under the new YDEX ticker will start on July 24.
(Reporting by Alexander Marrow; Editing by Susan Fenton)
