Microsoft (MSFT) stock rose as OpenAI delivers Norwegian Stargate deal

TLDR

• OpenAI has abandoned its plans to lease computing capacity from Norway’s Stargate data center in Narvik, after failing to close a deal with UK-based AI startup Nscale.
• Microsoft stepped in and expanded its agreement with Nscale to add more than 30,000 Nvidia Rubin GPUs at the 230-megawatt facility.
• The Narvik deal is a five-year agreement starting in 2026, powered entirely by renewable energy, and targeting up to 100,000 Nvidia GPUs in total.
• This follows a pattern of Microsoft absorbing Stargate-related capacity previously associated with OpenAI, including the Texas project previously associated with OpenAI and Oracle.
• OpenAI has revised its long-term infrastructure spending forecast from $1.4 trillion to $600 billion by 2030, and is shifting toward leasing computing rather than building its own facilities.

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Microsoft had a data center deal in Narvik, Norway, but OpenAI pulled out. The move adds more than 30,000 Nvidia Rubin GPUs to Microsoft’s existing on-site footprint, and comes as OpenAI is quietly scaling back its infrastructure ambitions.

Microsoft Corporation, MSFT

The facility, known as Norway’s Stargate, is being built by UK-based AI startup Nscale. It was originally planned to be a 230MW campus, with OpenAI in discussions to lease around half the capacity as a “pre-offender”. Those talks collapsed, and Microsoft intervened.

The new agreement expands Microsoft The current deal is with Nscale at the Narvik Campus. It will run for five years starting in 2026, and the computing will be powered entirely by renewable energy. The full site targets up to 100,000 Nvidia GPUs in total capacity.

“Expanding our work with Nscale in Narvik helps ensure Microsoft customers have access to the advanced AI infrastructure they need as demand continues to grow across Europe,” said John Tainter, head of business and enterprise development at Microsoft.

OpenAI confirmed that it is now in discussions with Microsoft to lease computing capacity from the Narvik facility, rather than taking it directly. A company spokesperson said this approach “makes more financial sense” and falls within OpenAI’s current contracted spending of $250 billion on Microsoft’s Azure cloud platform.

A broader pattern of decline

This is not an isolated incident OpenAI. Last week, the company confirmed it had halted a separate Stargate project in the UK, due to energy costs and the country’s regulatory environment. Microsoft also previously intervened in a Stargate-related project in Texas that involved OpenAI and Oracle.

OpenAI’s infrastructure strategy appears to be changing. The company told investors in February that it now expects to spend about $600 billion on computing through 2030, a notable decline from the previous forecast of $1.4 trillion over eight years. Reports indicate that it is moving towards leasing capacity rather than building its own data centres.

Microsoft stock rose 4.19% on the day of the announcement, reflecting positive market sentiment around the news.

Microsoft is delving deeper into its AI infrastructure

While OpenAI is retreating, Microsoft is adding capabilities. In March, Nscale announced that it would support Microsoft’s rollout of Nvidia Vera Rubin platform across the UK, Norway and other locations. Narvik’s expansion depends on that relationship.

Microsoft also plans to acquire approximately 3,200 acres in Cheyenne, Wyoming, to increase US data center capacity. The Narvik deal adds to its existing $6.2 billion commitment to the site.

According to the latest available data, 38 Wall Street analysts rate Microsoft a “Strong Buy,” with a 12-month consensus target price of $573, implying an upside of roughly 40% from current levels.