The "AI infrastructure wave" spreads to Europe, Microsoft signs a $14 billion "European AI cloud mega deal," leasing 116,000 NVIDIA GB300 GPUs

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

According to an announcement on Wednesday, the NVIDIA-backed cloud service provider Nscale will deploy approximately 104,000 of NVIDIA's latest GB300 chips for Microsoft at a facility in Texas, USA, within the next 12 to 18 months. Additionally, Nscale will provide another 12,600 GPUs for Microsoft at the Start Campus data center in Portugal. These new agreements build on a previous $6.2 billion contract involving the deployment of 52,000 NVIDIA GPUs for Microsoft in Norway.

The completion of this deal once again indicates that despite some investors' concerns about the AI market overheating, large tech companies are still steadfastly advancing infrastructure development. For the one-year-old Nscale, this major order is a key step towards going public. The company's CEO, Josh Payne, stated in a media interview, "We have ambitions to go public," and hopes to achieve this goal in "the second half of next year."

As the absolute leader in global AI chips, NVIDIA plays a key role in this transaction, serving both as a chip supplier and an important investor in Nscale. This move reflects NVIDIA's strategy of accelerating the expansion of the AI ecosystem by investing in its customers, which, while promoting the construction of the next generation of AI data centers, has also sparked discussions about whether it is fueling a tech bubble.

Decoding the Expensive Order

Nscale and Microsoft did not disclose the specific amount of the new agreement announced on Wednesday, but media estimates based on the unit price of previous contracts suggest that the new order could bring up to $14 billion in revenue for the startup.

The scale of these agreements presents a significant challenge for Nscale. In addition to deploying over 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, with the project expected to be operational by early 2026. The design of this data center can support over 130 kW of cabinet power density to meet the stringent power and cooling requirements of advanced AI workloads.

Jon Tinter, President of Business Development and Venture Capital at Microsoft, stated:

"Given Nscale's deep expertise in providing scalable AI infrastructure services, it is the ideal partner to accomplish this mission."

According to media reports citing informed sources, in response to the computing power shortage caused by the surge in AI applications, Microsoft has recently signed agreements with several "new cloud" providers offering high-performance cloud computing services, including Coreweave Inc. and Nebius

Nscale's "Rocket-like" Rise

Nscale's development trajectory is nothing short of astonishing. The company was just spun off from an Australian Bitcoin miner last year and restructured into an AI cloud service provider, but in the past month alone, it has raised $1.5 billion in new funding, reaching a valuation of approximately $3 billion.

Nscale's CEO Josh Payne admitted that this business has a very high capital expenditure intensity, stating, "You are always fundraising." He revealed that due to strong investor demand, the next round of private financing will be completed "very soon." Although the company has not been established for long and has yet to complete a brand new construction project from scratch, Payne emphasized that the company has recruited industry veterans, including data center industry veteran Alex Sharp as Chief Operating Officer and Chief Technology Officer David Power, who has over 20 years of supercomputing construction experience.

Payne believes that the biggest risk of the current market slowdown does not come from insufficient demand, but rather from "power shortages." He stated:

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

NVIDIA's "Ecosystem" Investment

NVIDIA's support has been key to Nscale quickly gaining market trust. According to G Squared partner Spencer McLeod, "The turning point for this company happened within two weeks," and NVIDIA's endorsement caused previously cautious investors to "suddenly dive in."

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

This strategy of "investing in customers" is not an isolated case. Reports indicate that NVIDIA has also invested in Nscale's cloud competitors CoreWeave, Nebius, and OpenAI, aiming to accelerate the global wave of AI-specific data center construction. In response to concerns that this move could create a bubble, Payne stated that the data center business has "real hard asset value to protect your downside risk."

Europe as a New Battleground, Power and Sustainability are Key

As the AI infrastructure race heats up, Europe is becoming a new key battleground due to its unique advantages. Nscale's choice to deploy its European AI facilities at the Start Campus in Sines, Portugal, is based on its strategic location, readiness for deployment, and scalability.

Portugal is at the forefront of renewable energy. According to data from its national grid operator, renewable energy accounted for 71% of the country's electricity consumption in 2024, rising to 81% by the first quarter of 2025. At the same time, the country's energy prices are competitive within the EU and Eurozone. The Start Campus park plans to utilize 100% renewable energy and use seawater for cooling to reduce reliance on scarce freshwater resources. Portuguese government officials have also welcomed this investment Nscale's layout in Europe is rapidly expanding. In addition to projects in Portugal and Norway, it is also collaborating with Microsoft to build the country's largest AI supercomputer in the UK and has established a joint venture with Aker ASA. These initiatives collectively highlight Nscale's growing influence in the global AI infrastructure sector