In a significant move to bolster artificial intelligence (AI) capabilities, AI hyperscaler startup Nscale has entered into a substantial agreement with Microsoft to deploy Nvidia AI hardware across multiple data centers. This collaboration underscores the escalating demand for advanced AI infrastructure and the strategic alliances forming to meet this need.
Deployment of Nvidia GB300 GPUs
Under the terms of the agreement, Nscale will supply approximately 200,000 Nvidia GB300 GPUs to three European data centers and one in the United States. These GPUs will be integrated through Nscale’s operations and a joint venture with investment firm Aker, a notable investor in Nscale.
Texas Data Center Expansion
A significant portion of these GPUs, totaling 104,000 units, is slated for deployment at a data center in Texas leased by Ionic Digital over the next 12 to 18 months. Nscale has ambitious plans to expand its capacity at this location to 1.2 gigawatts, reflecting the company’s commitment to scaling its operations to meet growing AI demands.
European Deployments
In Europe, Nscale will begin deploying 12,600 GPUs to the Start Campus data center in Sines, Portugal, starting in the first quarter of 2026. This initiative builds upon previous collaborations with Microsoft and Aker concerning data centers in Norway and the United Kingdom. Specifically, Nscale plans to allocate 23,000 GPUs to its Loughton, England campus beginning in 2027, and the remaining 52,000 GPUs to Microsoft’s AI campus in Narvik, Norway.
Strategic Significance
Josh Payne, founder and CEO of Nscale, emphasized the importance of this partnership, stating, This agreement confirms Nscale’s place as a partner of choice for the world’s most important technology leaders. Few companies are equipped to deliver GPU deployments at this scale, but we have the experience and have built the global pipeline to do so.
Rapid Growth and Future Plans
Founded in 2024, Nscale has experienced rapid growth, securing over $1.7 billion in funding from strategic partners such as Aker, Nokia, and Nvidia. Additional investors include Sandton Capital Partners, G Squared, and Point72. Payne indicated that the company is considering an initial public offering (IPO) as early as the end of next year, signaling confidence in Nscale’s trajectory and market position.
Industry Context
The AI infrastructure sector has witnessed a flurry of activity in recent weeks. OpenAI announced plans to purchase six gigawatts’ worth of chips from AMD and secured a deal with Nvidia, wherein Nvidia will invest up to $100 billion in OpenAI in exchange for 10 gigawatts’ worth of chips. These developments highlight the intense competition and rapid advancements within the AI industry.
Conclusion
The partnership between Nscale and Microsoft represents a significant milestone in the expansion of AI infrastructure. By deploying a substantial number of Nvidia GPUs across multiple data centers, this collaboration aims to meet the growing computational demands of AI applications. As Nscale continues to scale its operations and explore future opportunities, including a potential IPO, the company is poised to play a pivotal role in shaping the future of AI infrastructure.
