The co-founder of Russian technology company Yandex is planning to launch an artificial intelligence venture in Europe made up mainly of former Yandex employees after the parent company signed a deal this week to pull out of Russia.
Arkady Volozh, one of the few two prominent Russian businessmen to condemn Moscow's invasion of Ukraine, will head Nevius Group, an AI infrastructure company and the Netherlands-based parent company of the former Nasdaq-listed Yandex.
The move marks an effort by Volozh to salvage some of Yandex's former international operations after Russia's war in Ukraine disrupted the company and forced thousands of employees to flee the country.
“clearly, [can we not] “Not only will they build something using Russian technology, but the Russian tech business itself will continue to survive on its own,” Volozh told the Financial Times in an interview. “When this all happened, half of Yandex's management and 10 percent of its developers were outside Russia.”
He added: “We saw new opportunities. Finally, we had the freedom to do something new.”
Volozh led a team of 1,300 mostly ex-Yandex employees to found Nevius, whose main business is developing a cloud computing platform specifically designed to help startups train and run large-scale AI models.
Voloz said Nevius has already partnered with some of Europe's best-known AI startups in France and Germany, and has 500 engineers focused on developing a dedicated cloud infrastructure.
“We have engineers who have built large technology infrastructure.[at Yandex]”…we know how to do it very efficiently,” he said. “We know how to interconnect supercomputers…and we know how to build very large clusters.”
The $5.4 billion sale of Yandex's core Russian assets would be the largest by a Western company to leave Russia during the conflict and came after two years of drawn-out negotiations that required President Vladimir Putin's personal approval for assets the Kremlin considers strategically important.
The company worked on the deal with the help of Alexei Kudrin, a former finance minister with longstanding ties to Putin, and used him to negotiate with Sergei Kiriyenko, the Kremlin's top domestic official.
The Ukraine war has dashed Mr Volozh's ambitions to turn Yandex, which at its peak had a market capitalization of $30 billion, into a global internet giant, leading key technology partners to distance themselves from the company and causing Nasdaq to suspend trading of the company's shares.
Yandex’s core operations in Russia, which accounted for 95 percent of the group’s revenue, assets and employees, are now owned by a consortium that includes the company’s management and several Kremlin-approved investors.
In 2022, the EU imposed sanctions on Volozh, accusing Yandex of contributing to the war.
Voloj stepped down as CEO, handed over his controlling shares to the board of directors and issued a statement a year later saying “the invasion is barbaric and I am firmly opposed to it.”
He regained control of Nevius' voting power after the company's split with Yandex.
The EU agreed this year not to renew sanctions against Volozh, making him the first person to be removed from the list for speaking out against the war.
“I still stand by the same position. It's been that way since the beginning,” Voloj said when asked about his anti-war statements.
“A lot of people changed their lives, and they just didn't want to stay for a reason,” he said. “It wasn't because they were running from the military. They left because they didn't want this to be done in their name. They didn't want to stay.”
Volozh, an Israeli citizen who moved to Israel in 2014, hopes the venture will allow Nevius to tap the engineering talents of former Yandex employees without facing the stringent regulations imposed on Russian companies trying to operate in the West.
“We have absolutely no connection – zero,” he said. “There are no bytes or bits passing between us and the previous company. This is a new company, new infrastructure, new legal entity.”
The Nasdaq-listed company is building clusters of tens of thousands of Nvidia chips in an existing data center in Finland and plans to triple its size to take on major cloud providers such as Microsoft, Amazon and Google for AI applications.
Nevius touts its “strong, long-term relationship” with AI chip giant Nvidia to source powerful new processors at a time of surging demand, and its data centers house what it says are Europe's most powerful supercomputers.
“Has entered [Nvidia’s] “They're interested in diversifying their customer base and developing talent like us,” Voloj said. “We've been working with them for years. They know us and they trust us.”
Nevius has commissioned an audit by a Big Four accounting firm to prove it no longer has any ties to Russia, he added.
“You basically own the same stock, but it's a different company. [that has] “We've completely pivoted. We can't offer any more exposure to the Russian IT ecosystem, but we can probably offer something more interesting,” he said.
“We used to be a big tech company, which means we had a very big ecosystem, a lot of users generating a lot of data. It's a different world now,” Voloj says. “Then, like any other startup, we came out there with nothing. This was a new and refreshing feeling.”
Following the split, Nevius retained Yandex's other three internationally focused businesses, including data annotation and generation, education, autonomous vehicles, Finnish data centers, and intellectual property licensing.
Volozh said developers were scrambling to keep up with rapid AI-driven technological change while also grappling with a split with Yandex, forcing them to rework large parts of the project on the fly.
“It was a nasty situation,” Volozh said. “They were moving people out of Russia, trying to restructure, and in parallel their business model changed.”
The renamed company, Nevius, has $2.5 billion in cash after the sale of Yandex's Russian operations and no debt, allowing it to invest some of the money in expanding its business and return a “significant percentage” to shareholders.
Nevius will continue to report to the U.S. Securities and Exchange Commission, plans to assemble a new board of directors and hopes to resume trading on the Nasdaq “at the appropriate time” with an eye on raising further capital.
“We have an opportunity to build something bigger than we've had before,” Voloj said. “The scale of what we're building assumes billions of dollars of investment in the future through debt and equity. I think what we have now is on a scale that doesn't exist in Europe outside of the big tech sector.”
