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

Microsoft Takes Over Stargate Data Center From OpenAI in Norway

Microsoft Corp. has agreed to rent data center capacity at a site in Norway that was initially intended for OpenAI and marketed as part of the artificial intelligence company's Stargate initiative. Microsoft will rent 30,000 additional Nvidia Corp. Vera Rubin chips from neocloud provider Nscale at a campus inside the arctic circle in Narvik, Norway, Nscale said in a statement. This builds on a prior $6.2 billion commitment Microsoft made at the same site. OpenAI had initially been in talks for capacity to run its artificial intelligence workloads at the campus, but didn't conclude an agreement with Nscale, according to people familiar with the discussions. The company had marketed it as "Stargate Norway" in a statement last year, a reference to its planned $500 billion joint venture investment in US infrastructure to power the next era of AI. Last week, OpenAI said it was pausing its analogous Stargate effort in the UK, another Nscale-developed site, citing the country's high cost of energy and regulation. Nscale, meanwhile, 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 deal, who asked not to be identified because the agreement isn't yet public. Google didn't immediately respond to requests for comment. OpenAI's plan to pause its Stargate project in the UK, and its failure to strike a deal with Nscale in Norway, mark a contrast from the AI giant's previously signaled infrastructure plans. After a series of splashy announcements in recent years, OpenAI appears to be taking a more cautious approach to its rising server farm costs. 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 telegraphed. An OpenAI spokesperson said the company continues to explore an agreement for capacity in Norway and the company is working with a number of partners to build up its infrastructure. "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," OpenAI Chief Executive Sam Altman said in a statement in July. 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. Last month, Microsoft announced it would take over a project in Texas that was originally being developed for OpenAI and Oracle Corp. 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 development.

OpenAI pulls back from Stargate Norway data center deal as Microsoft takes over

OpenAI has moved to temper expectations of its spending plans as a potential IPO looms this year. OpenAI has abandoned plans to rent compute capacity directly from a Norwegian data center, days after confirming it paused a similar project in the U.K. Microsoft is taking the extra compute previously earmarked for OpenAI at a planned 230MW "Stargate Norway" facility in Narvik. OpenAI is now in discussions to rent capacity from Microsoft instead, a spokesperson for the company told CNBC. The AI company said in 2025 it had the opportunity to be an "initial offtaker" at the data center, which OpenAI positioned under the umbrella of its "Stargate" infrastructure project and was being built by UK AI cloud startup Nscale. OpenAI was in discussions to rent around half of the facility's capacity, a source with firsthand knowledge of the matter told CNBC. The source said that Nscale and OpenAI ultimately did not agree on an offtake deal, with Microsoft stepping in to take up the capacity. Bloomberg reported on Tuesday that OpenAI didn't conclude its offtake talks at the data center with Nscale. An OpenAI spokesperson declined to comment on the amount of capacity it discussed renting as part of a potential offtake deal. The company told CNBC that it was in discussions to rent capacity from Microsoft, adding that this made more financial sense for the company, falling under existing contracted spending. "We are moving ahead with our plans in Norway," an OpenAI spokesperson told CNBC. "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." They referred CNBC to its October announcement that it had contracted to purchase $250 billion of services from Azure, Microsoft's cloud-computing division. Nscale announced on Tuesday that Microsoft was expanding its agreement at the Narvik campus, adding more than 30,000 Nvidia Rubin GPUs in deployment. In March, Nscale said it would support Microsoft with its deployment of Nvidia's Vera Rubin platform across sites in the UK, Norway and beyond. "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," Jon Tinter, president of business development and ventures at Microsoft, said in Tuesday's statement. OpenAI has moved to temper expectations of its spending plans as a potential IPO looms this year. The company confirmed it had halted plans for its U.K. Stargate project last week, citing the cost of energy and the country's regulatory environment. In March, OpenAI announced it was shuttering its video generation service Sora. Funding has continued to pour in for the startup. March also saw OpenAI announce it had closed a record $122 billion funding round, at a post-money valuation of $852 billion. After 2025 saw it announce a flurry of AI infrastructure investments, OpenAI told investors in February that it was targeting roughly $600 billion in total compute spend by 2030, following comments from CEO Sam Altman in November that the company would hit $1.4 trillion in infrastructure commitments over the next eight years.

Microsoft takes over OpenAI's Norway Stargate data center

Microsoft $MSFT has expanded its agreement with U.K. AI cloud company Nscale to take over compute capacity at a 230 MW data center campus in Narvik, Norway -- capacity that had been earmarked for OpenAI under its "Stargate" infrastructure initiative. A source told CNBC that OpenAI wanted to lease roughly half of the Narvik facility's capacity and had described itself as the "initial offtaker" at the site. However, Nscale and OpenAI ultimately failed to finalize terms, at which point Microsoft stepped in to absorb the available capacity. Rather than securing capacity directly from Nscale, OpenAI said it plans to obtain that compute through Microsoft, since this makes better use of funds already committed under a previously announced $250 billion contract with Azure, Microsoft's cloud division. "We are moving ahead with our plans in Norway," an OpenAI spokesperson told CNBC. "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." The deal calls for Nscale to bring over 30,000 Nvidia $NVDA Rubin GPUs online at the Narvik campus as part of the broadened arrangement. The company described the deployment as one of the largest onshore infrastructure projects in Norway. An earlier Nscale commitment, made in March, had already positioned the company to help bring Nvidia's Vera Rubin platform to Microsoft facilities spanning the U.K., Norway, and additional locations. "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," Jon Tinter, president of business development and ventures at Microsoft, said in a statement. The Norway development follows a separate retreat by OpenAI from another Stargate project. OpenAI paused its Stargate U.K. data center project earlier this month, citing high energy costs and the country's regulatory environment. That project had called for deploying as many as 8,000 GPUs -- with longer-term ambitions reaching 31,000 -- through a partnership that also involved Nscale and Nvidia. The Norway retreat is part of a broader pattern of OpenAI scaling back certain capital commitments. The company wrapped up a $122 billion fundraise in March, leaving it valued at $852 billion on a post-money basis. Despite the pullbacks, OpenAI's stated ambition of reaching approximately $600 billion in compute expenditures by 2030 remains on the table, according to guidance the company provided to investors in February.

Microsoft takes over Stargate data center from OpenAI in Norway - The Economic Times

Microsoft has agreed to rent data center capacity at a site in Norway that was initially intended for OpenAI and marketed as part of the artificial intelligence company's Stargate initiative. Microsoft will rent 30,000 additional Nvidia Vera Rubin chips from neocloud provider Nscale at a campus inside the arctic circle in Narvik, Norway, Nscale said in a statement. This builds on a prior $6.2 billion commitment Microsoft made at the same site. OpenAI had initially been in talks for capacity to run its artificial intelligence workloads at the campus, but didn't conclude an agreement with Nscale, according to people familiar with the discussions. The company had marketed it as "Stargate Norway" in a statement last year, a reference to its planned $500 billion joint venture investment in US infrastructure to power the next era of AI. Last week, OpenAI said it was pausing its analogous Stargate effort in the UK, another Nscale-developed site, citing the country's high cost of energy and regulation. Nscale, meanwhile, has found another client for a separate data center facility in West London: Alphabet's Google, which will rent capacity at a facility running Nvidia's Grace Blackwell chips, according to a person familiar with the deal, who asked not to be identified because the agreement isn't yet public. Google didn't immediately respond to requests for comment. OpenAI's plan to pause its Stargate project in the UK, and its failure to strike a deal with Nscale in Norway, mark a contrast from the AI giant's previously signaled infrastructure plans. After a series of splashy announcements in recent years, OpenAI appears to be taking a more cautious approach to its rising server farm costs. 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 telegraphed. An OpenAI spokesperson said the company continues to explore an agreement for capacity in Norway and the company is working with a number of partners to build up its infrastructure. "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," OpenAI chief executive Sam Altman said in a statement in July. 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. Last month, Microsoft announced it would take over a project in Texas that was originally being developed for OpenAI and Oracle. 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 development.

OpenAI recalibrates investments as Microsoft secures Norway capacity

According to reports from CNBC, OpenAI has scaled back its infrastructure ambitions by opting out of a direct lease for computing capacity at a data center in Norway, just days after suspending a similar project in the United Kingdom. This pivot reflects a more cautious strategy as the company seeks to rein in capital expenditure ahead of a potential IPO. Negotiations with British firm Nscale for a 230-megawatt site in Narvik failed to materialize, allowing Microsoft to take over the capacity originally earmarked for the AI startup.