Microsoft partners with Nscale for the fourth time in two months to jointly build a 240-megawatt AI data center in Texas
Microsoft and Nscale have reached their fourth cooperation agreement in Texas to jointly build a 240-megawatt AI data center. The facility is expected to be operational in the third quarter of 2026, equipped with approximately 104,000 NVIDIA GB300 chips. Although Nscale has not yet built a data center, Microsoft still chose to collaborate with them. Nscale plans to go public next year and has reached several similar agreements with Microsoft, including projects in Norway and Portugal
According to Zhitong Finance APP, Nscale, a developer of data centers focused on artificial intelligence, has agreed to build a data center for Microsoft (MSFT.US) in Texas, marking the fourth similar agreement between the two companies in the past two months.
According to Nscale's statement on Wednesday, the new site will have a power capacity of up to 240 megawatts. The UK startup stated that the facility, which is set to be operational in the third quarter of 2026, will deploy approximately 104,000 new NVIDIA GB300 chips. The specific location in Texas was not disclosed in the statement.
Founded in 2024, Nscale was spun off from a cryptocurrency mining company. It has become one of the most active new AI chip leasing companies, capitalizing on the surge in demand for computing resources. In recent months, these companies have announced a series of new facility plans as part of a global push to support AI models and services.
All of this is happening against the backdrop of the AI industry not yet reporting profits, and many of these infrastructure developers lacking experience. For example, Nscale has yet to build a single data center.
Nevertheless, Microsoft is still willing to partner with them. Last month, the software giant reached a five-year, $6.2 billion agreement with Nscale to build a data center in Norway. Nscale stated on Wednesday that the number of NVIDIA GB300 chips planned for deployment in Norway is about half that of the new site in Texas.
On Tuesday, Microsoft and Nscale announced plans to build a new data center in Portugal, following a similar agreement for a future site in the UK.
Microsoft has made several such deals with so-called "new cloud operators" to compensate for its shortfall in proprietary server computing capacity.
Nscale CEO Josh Payne stated that the startup is seeking to go public as early as next year.
Compared to other recent projects, the planned Texas facility is relatively small in scale.
OpenAI plans to invest approximately $400 billion in its "Stargate" AI infrastructure development project, developing five sites with a total capacity of about 7 gigawatts. Microsoft is currently building a data center in Wisconsin with a capacity of at least 900 megawatts
