The "AI infrastructure boom" spreads to Europe as Microsoft signs a $14 billion "European AI cloud mega-deal," leasing 116,000 Nvidia GB300 GPUs.

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The global demand for artificial intelligence infrastructure is spreading from the United States to Europe, as marked by a series of massive collaborations between UK startup Nscale and Microsoft, signaling an acceleration of this trend. The latest deal, valued at up to $14 billion, will provide Microsoft with powerful computing power driven by Nvidia's latest chips.

According to an announcement on Wednesday, Nscale, a cloud service provider backed by Nvidia, will deploy approximately 104,000 of Nvidia’s latest GB300 chips for Microsoft at a facility in Texas over the next 12 to 18 months. In addition, Nscale will provide Microsoft with another 12,600 GPUs at Start Campus data center in Portugal. These new agreements build on a previous $6.2 billion contract that involved deploying 52,000 Nvidia GPUs for Microsoft in Norway.

The conclusion of this deal once again demonstrates that, despite some investors’ concerns about an overheating AI market, major tech companies remain steadfast in advancing infrastructure construction. For the year-old Nscale, this major order is a key step towards going public. The company’s CEO, Josh Payne, said in a media interview: “We have ambitions to go public,” and hope to achieve the goal “in the second half of next year.”

As the absolute global leader in AI chips, Nvidia played a critical role in this deal, acting both as a chip supplier and as an important investor in Nscale. This move reflects how Nvidia is accelerating the expansion of the AI ecosystem by investing in its customers—a strategy that, while driving the new generation of AI data centers, is also arousing discussions about whether it is fueling a tech bubble.

Decoding the Billion-Dollar Order

Nscale and Microsoft did not disclose the specific value of the new deal announced on Wednesday, but media estimates based on the unit price of previous contracts suggest the new orders may bring as much as $14 billion in revenue to this startup.

The scale of these agreements is a tremendous challenge for Nscale. In addition to deploying more than 100,000 GB300 GPUs in Texas, the company will also deploy 12,600 Nvidia Blackwell Ultra GB300 GPUs at the Start Campus data center in Sines, Portugal, a project expected to begin operations in early 2026. The data center is designed to support cabinet power density in excess of 130kW to meet the stringent power and cooling demands of advanced AI workloads.

Jon Tinter, Microsoft’s Corporate Vice President for Business Development and Ventures, stated:

“Given Nscale’s deep expertise in providing scaled AI infrastructure services, it is the ideal partner to accomplish this mission.”

According to media reports citing informed sources, in response to the surge in AI applications and resulting computing power shortages, Microsoft has recently signed agreements with several “neocloud” providers of high-performance cloud computing, including Coreweave Inc. and Nebius.

Nscale’s ‘Rocket-like’ Rise

Nscale’s growth trajectory is nothing short of amazing. Just last year, the company was spun off from an Australian bitcoin miner and restructured into an AI cloud service provider, yet in just the past month, it raised $1.5 billion in new funding, reaching a valuation of about $3 billion.

Nscale CEO Josh Payne candidly admits that this business is extremely capital intensive—“you are always fundraising.” He revealed that, due to strong investor demand, the next round of private fundraising will be completed “soon.” Despite the company’s short history and not yet having completed a brand-new construction project from scratch, Payne emphasizes that the company has recruited industry veterans, including Chief Operating Officer and data center industry veteran Alex Sharp, and CTO David Power, who has 20 years of supercomputing construction experience.

Payne believes that the greatest risk to the current market downturn is not insufficient demand, but rather “power shortages.” He stated:

“Our capacity for the next 12 months is nearly sold out. We expect this situation to continue as we enter the next GPU cycle.”

Nvidia’s ‘Ecosystem’ Investments

Nvidia's backing has been a key to Nscale rapidly gaining market trust. According to G Squared partner Spencer McLeod, “This company's turning point happened within two weeks”, and Nvidia’s endorsement caused previously hesitant investors “to suddenly go all in.”

Last month, Nvidia CEO Jensen Huang announced a £500 million investment in Nscale to accelerate the deployment of up to 300,000 GPUs, calling it the “national champion of the UK.” Huang predicts that AI facilities running these chips could generate up to £50 billion in revenue over the next six years.

This customer-investment strategy is not unique. According to reports, Nvidia has also invested in Nscale’s cloud competitors CoreWeave, Nebius, and OpenAI, aiming to accelerate the global wave of AI-dedicated data center construction. Addressing concerns that such moves might create a bubble, Payne responds that the data center business has “real hard asset value to protect your downside risk.”

Europe Becomes a New Battleground: Power and Sustainability are Key

As the AI infrastructure race heats up, Europe, with its unique advantages, is becoming a new key battleground. Nscale chose to deploy its European AI facility at Start Campus in Sines, Portugal, precisely for its strategic location, state of readiness, and scalability.

Portugal is at the forefront of renewable energy. According to the country’s national grid operator, in 2024, renewables accounted for 71% of its power consumption, rising to 81% in the first quarter of 2025. At the same time, its energy prices are competitive within the EU and Eurozone. The Start Campus park plans to use 100% renewable energy and employ seawater cooling to reduce reliance on scarce freshwater resources. Portuguese government officials have also welcomed this investment.

Nscale’s European presence is rapidly expanding. In addition to projects in Portugal and Norway, it is working with Microsoft in the UK to build the country’s largest AI supercomputer, and has formed a joint venture with Aker ASA. These moves all demonstrate Nscale’s growing influence in the global AI infrastructure sector.

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