TLDR
- OpenAI abandoned plans to rent compute capacity from the Stargate Norway data center in Narvik, after failing to finalize a deal with UK-based AI cloud startup Nscale.
- Microsoft stepped in, expanding its agreement with Nscale to add over 30,000 Nvidia Rubin GPUs at the 230MW facility.
- The Narvik deal is a five-year agreement starting in 2026, powered entirely by renewable energy, targeting up to 100,000 Nvidia GPUs in total.
- This follows a pattern of Microsoft absorbing Stargate-linked capacity previously tied to OpenAI, including a Texas project formerly associated with OpenAI and Oracle.
- OpenAI has revised its long-term infrastructure spending outlook down from ~$1.4 trillion to ~$600 billion by 2030, and is shifting toward leasing compute rather than building its own facilities.
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Microsoft picked up a data center deal in Narvik, Norway, that OpenAI walked away from. The move added more than 30,000 Nvidia Rubin GPUs to Microsoft’s existing footprint at the site, and comes as OpenAI quietly scales back its infrastructure ambitions.
The facility, known as “Stargate Norway,” is being built by UK-based AI cloud startup Nscale. It was originally planned as a 230-megawatt campus, with OpenAI in discussions to rent around half of the capacity as an “initial offtaker.” Those talks broke down, and Microsoft stepped in.
The new agreement expands Microsoft’s existing deal with Nscale at the Narvik campus. It runs for five years starting in 2026, and the compute will be powered entirely by renewable energy. The full site is targeting up to 100,000 Nvidia GPUs in total capacity.
“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,” said Jon Tinter, president of business development and ventures at Microsoft.
OpenAI confirmed it is now in discussions with Microsoft to rent compute capacity from the Narvik facility, rather than taking it directly. A spokesperson said this approach “makes more financial sense,” falling under OpenAI’s existing $250 billion contracted spend on Microsoft’s Azure cloud platform.
A Broader Pattern of Pullback
This is not an isolated incident for OpenAI. Last week, the company confirmed it had halted a separate Stargate project in the UK, citing energy costs and the country’s regulatory environment. Microsoft also previously stepped in on a Stargate-linked project in Texas that had involved OpenAI and Oracle.
OpenAI’s infrastructure strategy appears to be shifting. The company told investors in February it now expects to spend around $600 billion on compute through 2030 — a notable step down from earlier projections of $1.4 trillion over eight years. Reports indicate it is moving toward leasing capacity rather than building its own data centers.
Microsoft stock rose 4.19% on the day of the announcement, reflecting positive market sentiment around the news.
Microsoft Pushes Deeper Into AI Infrastructure
While OpenAI pulls back, Microsoft is adding capacity. In March, Nscale announced it would support Microsoft’s rollout of Nvidia’s Vera Rubin platform across UK, Norway, and other locations. The Narvik expansion builds on that relationship.
Microsoft is also planning to acquire roughly 3,200 acres in Cheyenne, Wyoming, for additional U.S. data center capacity. The Narvik deal adds to its existing $6.2 billion commitment at the site.
As of the latest available data, 38 Wall Street analysts rate Microsoft a “Strong Buy,” with a consensus 12-month price target of $573, implying roughly 40% upside from current levels.
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