UK's Nscale Uses $14B Microsoft Deal to Claim AI Supremacy

UK-based AI infrastructure provider Nscale has inked a landmark $14 billion deal with Microsoft to supply 200,000 Nvidia GB300 graphics processing units (GPUs) across data centers in the U.S. and Europe, marking one of the largest AI infrastructure contracts in history, according to Seeking Alpha. The agreement, announced on October 15, 2025, includes deployments of 104,000 GPUs in Texas and 12,600 in Portugal, with plans to scale capacity to 1.2 gigawatts by 2027, per DC Pulse. The deal builds on a previous $6.2 billion partnership between Nscale and Microsoft in Norway, where the companies are constructing a hyperscale AI campus in Narvik, as reported by DataCenter Dynamics.

The expansion underscores Microsoft's aggressive strategy to bolster its AI infrastructure amid surging global demand for compute power. Microsoft President Brad Smith called the deal "a major vote of confidence in Nscale," emphasizing its role in enabling Azure services across the UK and Europe, according to CNBC. The Texas facility, leased from Bitcoin miner Ionic Digital, will initially house 23,040 Nvidia Blackwell GPUs, generating 50 megawatts of AI capacity scalable to 90 megawatts, DataCenter Dynamics reported.

Nscale's rapid ascent has been fueled by a $1.1 billion Series B funding round in September 2025, led by Aker ASA and including investors like Dell, Fidelity, and Nvidia, according to Datacentre Magazine. The round, described as the largest in UK and European history, positions Nscale to accelerate its 1.3 gigawatt pipeline of greenfield data centers across Europe and North America. Nvidia CEO Jensen Huang highlighted the startup's potential, stating, "We convinced ourselves that Nscale could be a national champion for AI infrastructure in the UK," CNBC reported.

The UK has emerged as a focal point for Nscale's growth, with plans to invest £2.5 billion in domestic data centers over three years, according to an Nscale press release. The company's Loughton, Essex campus will host the UK's largest AI supercomputer, initially deploying 23,040 GB300 GPUs by Q1 2027. Prime Minister Keir Starmer hailed the project as a "decisive step" toward making the UK a global AI leader, aligning with the government's AI Opportunities Action Plan, per a StreetInsider announcement.

Partnerships with OpenAI and Nvidia further cement Nscale's role in the AI ecosystem. The trio's Stargate UK initiative aims to deploy 8,000 GPUs initially, with potential scaling to 31,000 units, TechRadar Pro reports. OpenAI CEO Sam Altman emphasized the project's economic and scientific benefits, stating it will "accelerate breakthroughs and drive productivity growth," TechRadar Pro noted.

Despite its momentum, Nscale faces execution challenges. Building large-scale data centers requires navigating regulatory hurdles, securing renewable energy supplies, and managing supply chain risks for GPU deliveries, according to the Financial Times. CEO Josh Payne acknowledged these pressures, stating, "Execution is an enormous focus of mine" as the company targets an IPO in late 2026, DataCenter Dynamics reported.

The deal reflects broader trends in the AI arms race, with tech giants like Microsoft and Nvidia prioritizing strategic partnerships to meet soaring demand. As Nscale transitions from a crypto-mining spinoff to a hyperscale AI infrastructure leader, its ability to deliver on ambitious timelines will determine its place in the global AI landscape.

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