Nscale Signs $14 Billion Microsoft Deal for 200,000 Nvidia AI Chips

TLDR

• UK-based Nscale has signed a deal with Microsoft to deploy around 200,000 Nvidia AI chips across data centers in Europe and the United States
• The contract is valued at up to $14 billion and includes 104,000 GB300 chips for Texas and 12,600 GPUs for Portugal
• Nscale raised $1.1 billion in September from investors including Aker and Nokia, reaching a valuation of about $3 billion
• The company plans to go public by late 2026 and is investing £2-£2.5 billion in UK data center development
• Dell Technologies will collaborate on executing the deal, with chip deployment starting next year in Texas and Portugal

British artificial intelligence infrastructure company Nscale has reached an expanded agreement with Microsoft to supply around 200,000 Nvidia chips across multiple data centers. The deal, valued at up to $14 billion, represents one of the largest AI infrastructure contracts announced this year.

The agreement will be executed with Dell Technologies as a partner. Nscale will begin delivering Nvidia graphics processing units to Microsoft starting next year through its data centers in Texas and Portugal.

The Texas facility will receive approximately 104,000 of Nvidia’s GB300 chips over the next 12 to 18 months. The Portugal location, known as the Start Campus facility, will get an additional 12,600 GPUs.

This new contract builds on previous agreements between the two companies. Nscale’s joint venture with Norway’s Aker had already signed a multi-year deal to supply Microsoft with around 52,000 Nvidia GPUs from its AI campus in Narvik, Norway. That earlier contract was valued at $6.2 billion.

Nscale has grown rapidly since being spun out from an Australian Bitcoin mining operation just over a year ago. The company raised $1.1 billion in September from investors including Aker and Finland’s Nokia. That funding round gave Nscale a valuation of approximately $3 billion.

The investor group backing Nscale also includes Nvidia, Dell, Fidelity, and other major hardware and finance companies. Nvidia, which supplies the chips and holds a financial stake in Nscale, has previously described the company as a potential national champion for UK AI infrastructure.

UK Expansion Plans

Nscale has committed between £2 billion and £2.5 billion for data center development in the United Kingdom. The company’s first UK greenfield site is planned for Loughton, Essex.

The Essex facility is expected to deliver 50 megawatts of AI and high-performance computing capacity. The site can scale up to 90 megawatts with modular expansion and will house tens of thousands of GPUs. Construction is scheduled for completion in the fourth quarter of 2026.

IPO Timeline

Chief executive Josh Payne has indicated the company aims to go public by late 2026. The IPO timeline depends on whether Nscale can meet its construction schedules and chip delivery commitments.

The company has not yet completed a greenfield facility from scratch. Its current strength lies in contracting large volumes of GPU chips, securing binding agreements, and obtaining investment and sites.

Execution challenges remain for the business model. Building large-scale data centers requires navigating complex regulatory approvals, land use permissions, and environmental requirements across different jurisdictions.

Power supply represents another key challenge for Nscale’s expansion plans. AI data centers consume large amounts of electricity, requiring stable and cost-effective energy sources. Securing renewable power is becoming increasingly important to clients, regulators, and investors.

Supply chain logistics also pose risks to the timeline. Delivering hundreds of thousands of GPUs on schedule depends on Nvidia’s production capacity and global shipping conditions. Any delays in chip manufacturing or delivery could affect Nscale’s contractual obligations.

The Microsoft deal reinforces how major technology companies continue investing heavily in physical infrastructure for AI capabilities. Microsoft’s partnership positions Nscale as a strategic supplier for its cloud and AI services as demand for GPU-based computing grows worldwide.

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