Microsoft acquires Stargate Norway data center as OpenAI withdraws

OpenAI has decided to withdraw plans to directly lease compute power from a data center in Norway, just a few days after announcing a halt to a similar initiative in the UK.

Microsoft is now acquiring the additional compute resources that were initially set aside for OpenAI at the planned 230MW "Stargate Norway" site in Narvik.

OpenAI is currently negotiating with Microsoft to rent capacity from them instead, as confirmed by a company spokesperson to CNBC.

In 2025, the AI firm expressed interest in becoming one of the first users of the data center.

This project was part of OpenAI's "Stargate" infrastructure plan and was being developed by the UK-based AI cloud company Nscale.

According to a source familiar with the details, OpenAI had been negotiating to lease approximately half of the capacity at the facility, as shared with CNBC.

This insider shared that Nscale and OpenAI ultimately did not finalize an agreement for an offtake deal, with Microsoft stepping in to acquire that capacity.

On Tuesday, Bloomberg reported that OpenAI decided not to move forward with its rental discussions at the data center with Nscale.

An OpenAI spokesperson chose not to comment on the precise amount of capacity they had considered leasing.

However, the company informed CNBC that discussions to rent capacity from Microsoft are underway, noting that it made more financial sense as part of their existing contractual commitments.

"We are advancing our plans in Norway," an OpenAI spokesperson informed CNBC. "Microsoft is a vital partner within our network, and we will collaborate with them to secure computing resources in Norway, just as we have done in other regions globally."

They directed CNBC to their October declaration about their $250 billion service purchase agreement with Azure, the cloud division of Microsoft.

Nscale announced on Tuesday that Microsoft was expanding its contract at the Narvik location by integrating over 30,000 Nvidia Rubin GPUs.

In March, Nscale stated its support for Microsoft's deployment of Nvidia's Vera Rubin platform at several sites including those in the UK and Norway, with expectations of further expansion.

"Extending our collaboration with Nscale in Narvik ensures that Microsoft users have access to the cutting-edge AI infrastructure required as demand grows throughout Europe," Jon Tinter, Microsoft's president of business development and ventures, stated in the announcement on Tuesday.

OpenAI has moved to manage expectations around its spending strategies, especially as a potential IPO is anticipated this year.

Last week, the company confirmed it had paused plans for its UK Stargate project, citing energy costs and regulatory concerns in the country. In March, OpenAI revealed it was closing its short-form video app Sora.

The startup continues to attract funding. In March, OpenAI announced it had completed a milestone $122 billion funding round, resulting in a post-money valuation of $852 billion.