OpenAI pulls back from Stargate Norway data center deal as Microsoft takes over

OpenAI has decided to step back from its plans to lease computing resources from a data center in Norway, shortly after announcing a pause on a similar initiative in the United Kingdom. Microsoft is now set to utilize the additional computing capacity that was initially designated for OpenAI at the anticipated 230MW 'Stargate Norway' facility located in Narvik. According to a spokesperson for OpenAI, the company is currently negotiating to rent capacity from Microsoft instead. In 2025, OpenAI had been positioned to become an 'initial offtaker' for the data center, which was part of its broader 'Stargate' infrastructure project being developed by the UK-based AI cloud startup, Nscale. Sources familiar with the situation indicated that OpenAI was looking to secure approximately half of the facility's capacity, but ultimately, discussions with Nscale did not yield an agreement, leading Microsoft to step in. Recent reports reveal that OpenAI did not finalize its offtake talks with Nscale. While OpenAI's spokesperson refrained from commenting on the specifics of the capacity negotiations, they confirmed that the shift to renting from Microsoft made more financial sense, aligning with existing contractual obligations. 'We are moving ahead with our plans in Norway,' the spokesperson stated, emphasizing Microsoft's crucial role in their operational framework. In conjunction with this development, Nscale announced that Microsoft is expanding its agreement at the Narvik campus, which will now include the deployment of over 30,000 Nvidia Rubin GPUs. This expansion will facilitate the growing demand for advanced AI infrastructure across Europe, as highlighted by Jon Tinter, president of business development and ventures at Microsoft. OpenAI has also been adjusting its spending strategies amid speculation of an impending IPO, emphasizing the challenges posed by energy costs and regulatory conditions in the UK. The company recently confirmed the cessation of its U.K. Stargate project and the discontinuation of its video generation service, Sora. Despite these setbacks, OpenAI continues to attract significant investment, having concluded a record $122 billion funding round earlier this year, which positioned its valuation at $852 billion and set ambitious targets for future infrastructure investments.