Nscale has dramatically expanded its artificial intelligence infrastructure partnership with Microsoft through a landmark agreement that will see the UK-based company supply the technology giant with access to an additional 116,000 Nvidia GB300 GPUs across facilities in the United States and Europe. The deal, reportedly valued at $14 billion according to Financial Times reporting, represents one of the largest dedicated AI compute deployments announced to date and significantly deepens the relationship between the two companies.
Massive GPU Deployment Across Two Continents
The expanded agreement will see Nscale deliver substantial data center capacity at two strategic locations. In the United States, the company will provide Microsoft with access to 104,000 Nvidia GB300 GPUs at a 240MW facility in Texas. Simultaneously, the European deployment will deliver up to 12,600 additional GB300s at the Start Campus data center in Sines, Portugal. This dual-continent approach ensures Microsoft can meet growing AI compute demands across both major markets while maintaining geographic diversity in its infrastructure footprint.
The scale of this deployment underscores the massive computational requirements of modern AI systems. As companies worldwide race to develop and deploy increasingly sophisticated AI models, access to high-performance computing infrastructure has become a critical competitive advantage. This partnership positions Microsoft to maintain its leadership position in the rapidly evolving AI landscape while providing Nscale with a stable, long-term customer for its specialized infrastructure services.
Texas Deployment: Repurposed Bitcoin Mining Facility
The US deployment will be situated at a data center Nscale is leasing from Bitcoin miner Ionic Digital in Barstow, Texas. According to the official announcement through Business Wire, the facility will offer approximately 240MW of capacity, though Ionic’s own announcement notes this is actually 234MW. The phased delivery of Nvidia AI infrastructure services to Microsoft is scheduled to begin in the third quarter of 2026, representing a significant timeline for bringing this massive computational capacity online.
Nscale has ambitious plans to scale its footprint to 1.2GW over time, with Microsoft holding an option on a second phase of 700MW starting in late 2027. This repurposing of former Bitcoin mining infrastructure for AI computation represents an emerging trend in the industry, where specialized computing facilities are being adapted to meet the different but equally demanding requirements of artificial intelligence workloads compared to cryptocurrency mining operations.
Strategic European Expansion in Portugal
Nscale’s deployment at Start Campus in Sines, located south of Portugal’s capital Lisbon, is scheduled to be operational in the first quarter of 2026. The campus is planned to eventually comprise six buildings, though currently only SIN01 is operational after launching in January 2025. This European expansion provides Microsoft with crucial AI compute capacity within the European Union, addressing both performance requirements through reduced latency and potential regulatory considerations for data sovereignty.
The Start Campus location has faced some challenges, with the project previously involved in a corruption scandal that impacted the Portuguese government and resulted in multiple Start Campus executives being arrested amid investigations of alleged financial misconduct. However, charges against former CEO Afonso Salema have since been dropped, and Robert Dunn now serves as permanent CEO after acting as interim leader since November 2023. Despite this history, the facility represents a strategic asset for European AI infrastructure development.
Executive Perspectives on the Partnership
Josh Payne, founder and CEO of Nscale, emphasized the significance of the agreement: “Nscale is proud to partner with Microsoft on this historic AI infrastructure contract. 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.”
Payne further highlighted the company’s commitment to advancing AI infrastructure standards: “The pace with which we have expanded our capacity demonstrates both our readiness and our commitment to efficiency, sustainability, and providing our customers with the most advanced technology available. It’s a clear signal that Nscale is setting a new standard for how the next wave of AI infrastructure will be delivered.”
Jon Tinter, president of business development and ventures at Microsoft, echoed this sentiment: “Together with Nscale, Microsoft is delivering cutting-edge AI infrastructure for our customers. Our agreement, announced today, demonstrates our commitment to ensuring that our products are available globally with sustainability and scalability in mind. Nscale is an ideal partner for this mission, given its deep expertise in providing AI infrastructure services at scale.”
Growing Microsoft-Nscale Relationship
This massive agreement represents the latest development in an expanding partnership between Microsoft and Nscale. Last month, Microsoft signed a $6.2 billion deal to lease AI compute from Nscale in Norway. The two companies are also collaborating on a major UK project announced last month that will build a supercomputer with at least 23,000 Nvidia Grace Blackwell Ultra GPUs at Nscale’s planned data center in Loughton, Essex.
The combined value of these various agreements between Microsoft and Nscale now reaches approximately $14 billion, according to the FT report. This growing relationship reflects Microsoft’s strategic approach to expanding its AI compute capacity through partnerships with specialized infrastructure providers rather than exclusively building and operating its own facilities.
Nscale’s Rapid Growth and Future Ambitions
Since spinning out of a Bitcoin mining operation last year, Nscale has demonstrated remarkable growth, receiving more than $1 billion in funding from backers that include Nvidia itself. In an interview with the Financial Times, CEO Josh Payne revealed the company’s aspirations to go public in 2026, stating, “We have public market ambitions, and execution is an enormous focus of mine.”
This trajectory positions Nscale as a significant player in the emerging market for dedicated AI infrastructure providers. The company’s ability to secure such substantial contracts with major technology firms indicates both the growing demand for specialized AI compute and Nscale’s competitive positioning within this rapidly expanding market segment.
Broader Industry Context and Microsoft’s Strategy
Microsoft’s partnership with Nscale fits within a broader pattern of hyperscalers working with specialized infrastructure providers, often referred to as “neoclouds,” to rapidly expand AI compute capacity. Microsoft is a known customer of CoreWeave and signed a significant agreement with Nebius Group in September 2024. That five-year deal, valued at $17.4 billion, will provide capacity at Nebius’ new data center in Vineland, New Jersey.
This approach allows Microsoft to quickly scale its AI infrastructure without the capital expenditure and construction timelines associated with building entirely new facilities. As the AI industry continues to experience explosive growth, with developments like Nvidia’s AI dominance and emerging regulatory frameworks such as Anthropic’s AI principles shaping the landscape, access to computational resources has become increasingly strategic.
Global AI Infrastructure Competition
The massive scale of this deployment occurs against a backdrop of intense global competition in AI infrastructure development. As countries and companies worldwide recognize the strategic importance of artificial intelligence, investment in computational resources has accelerated dramatically. Recent developments like India’s clearing house expansion and shifting patterns in international business such as Chinese firms pulling back from US listings reflect the complex geopolitical dimensions of AI development.
Meanwhile, industrial investments continue globally, with companies like Scania investing $2 billion in new Chinese truck factories demonstrating that technological advancement and manufacturing capacity remain closely intertwined. In this context, partnerships like the Microsoft-Nscale agreement represent strategic moves to secure essential computational resources in an increasingly competitive global landscape.
Infrastructure Requirements for Next-Generation AI
The specific focus on Nvidia’s GB300 GPUs highlights the specialized hardware requirements of modern AI workloads. These high-performance processors are specifically designed for the massive parallel computation required by training and running large language models and other sophisticated AI systems. The deployment of over 116,000 of these units represents one of the largest dedicated AI compute installations announced to date.
As AI models continue to grow in size and complexity, the computational demands are increasing exponentially. This partnership ensures that Microsoft will have access to the cutting-edge hardware necessary to develop and deploy the next generation of AI systems, maintaining its competitive position in a market where computational capacity increasingly determines capability.
Environmental and Sustainability Considerations
Both companies have emphasized the importance of sustainability in their announcements, reflecting growing industry and regulatory focus on the environmental impact of large-scale computing operations. The deployment in Portugal specifically highlights the European Union’s stricter environmental standards, while the Texas facility’s power capacity of approximately 240MW represents significant energy consumption that will require careful management.
As AI infrastructure continues to expand globally, the energy requirements of these facilities are drawing increased scrutiny. Partnerships like this one will need to balance the massive computational demands of advanced AI systems with responsible environmental stewardship, particularly as regulatory frameworks around the world increasingly emphasize sustainable technology development.
Future Implications for AI Development
The scale and timing of this deployment suggest that both Microsoft and Nscale anticipate continued rapid growth in AI computational requirements through the latter half of the 2020s. With initial deployments scheduled for 2026 and expansion options extending into 2027 and beyond, this partnership represents a long-term commitment to supporting increasingly sophisticated AI systems.
As AI continues to transform industries and create new technological capabilities, access to specialized computational infrastructure like that being deployed through this partnership will likely become increasingly strategic. The companies that control or have reliable access to these resources may gain significant advantages in developing and deploying the next generation of artificial intelligence technologies that will shape the digital landscape for years to come.
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