Microsoft Takes Over Norway Stargate Data Center as OpenAI Pulls Back from Direct Infrastructure Deal

Microsoft Secures Stargate Data Center Capacity in Norway

Microsoft has agreed to rent data center capacity at a 230-megawatt site in Narvik, Norway, that was initially earmarked for OpenAI under the AI company's Stargate initiative1

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. The deal with neocloud provider Nscale will bring more than 30,000 Nvidia Rubin GPUs online at the campus inside the arctic circle, building on a prior $6.2 billion commitment Microsoft made at the same site2

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. Jon Tinter, president of business development and ventures at Microsoft, stated that "expanding our work with Nscale in Narvik helps ensure Microsoft customers have access to the advanced AI infrastructure they need as demand continues to grow across Europe"3

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OpenAI Abandons Direct Deal for Stargate Norway

OpenAI had initially been in talks to rent roughly half of the facility's capacity to run its artificial intelligence workloads at the campus, marketing it as "Stargate Norway" in a statement last year2

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. However, negotiations between Nscale and OpenAI ultimately did not conclude in an agreement, according to people familiar with the discussions1

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. An OpenAI spokesperson told CNBC that the company is now in discussions to rent compute capacity from Microsoft instead, explaining that this approach makes better financial sense and falls under existing contracted spending2

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. "We are moving ahead with our plans in Norway," the spokesperson said. "Microsoft is an important partner in our network and we will work with them to access compute in Norway just as we already do in other parts of the world"3

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Infrastructure Spending Strategy Shifts Amid IPO Preparations

The Norway development follows OpenAI's decision last week to pause its analogous Stargate effort in the UK, another Nscale-developed site, citing the country's high cost of energy and regulation1

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. These pullbacks mark a contrast from the AI giant's previously signaled AI infrastructure investments. After a series of announcements in recent years, OpenAI appears to be taking a more cautious approach to its rising server farm costs as a potential IPO looms this year5

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. The company told investors in February that it would spend about $600 billion on infrastructure by 2030, a more specific figure than the $1.4 trillion in long-range commitments it had previously telegraphed4

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. OpenAI CEO Sam Altman had said in a statement in July, "I've always said we'd love to bring Stargate to Europe if the conditions are right, and we think we've found that in Narvik"1

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Microsoft Aggressively Expands Its Data Center Footprint

Microsoft has cut a number of deals with neocloud providers such as Nscale as the company moves swiftly to get data centers online to meet demand for AI cloud services4

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. Last month, Microsoft announced it would take over a project in Texas that was originally being developed for OpenAI and Oracle1

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. Though it had an early start to the AI boom via its partnership with OpenAI, Microsoft has recently found itself short on capacity for cloud services. Wall Street expects Microsoft to spend $143 billion this year on capital expenditures, largely tied to data center development4

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. The deployment of Nvidia's Vera Rubin platform across sites in the UK, Norway and beyond represents one of the largest onshore infrastructure projects in the region3

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Google Steps In as Alternative Nscale Client

Meanwhile, Nscale has found another client for a separate data center facility in West London: Alphabet Inc.'s Google, which will rent capacity at a facility running Nvidia's Grace Blackwell chips, according to a person familiar with the deal1

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. Despite the pullbacks from direct infrastructure deals, OpenAI wrapped up a $122 billion fundraise in March, leaving it valued at $852 billion on a post-money basis3

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. The company continues to explore agreements for capacity in Norway and is working with a number of partners to build up its infrastructure, relying on its previously announced $250 billion contract with Azure, Microsoft's cloud-computing division2

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