UK AI Startup Nscale Outperforms Nvidia CEO Jensen Huang

Just two years ago, Nscale was a nascent U.K. startup, yet to secure external funding or even officially announce its presence.

Last year, the London-based firm emerged from stealth mode and, in December, disclosed a $155 million Series A funding round.

Now, Nscale finds itself at the epicenter of the burgeoning artificial intelligence market, fueled by nearly $700 million in fresh capital. This includes a strategic investment from Nvidia, the world’s leading chipmaker whose market capitalization reflects its dominance in the AI hardware space.

Recent press releases confirmed Nscale as a key AI infrastructure partner for Nvidia, Microsoft, and OpenAI, as these tech giants expand their operations in the U.K. Furthermore, Nscale announced a substantial five-year, $6.2 billion agreement with Microsoft and Aker, a Norwegian industrial investment company, to develop “hyperscale AI infrastructure” across Europe, particularly in Norway.

OpenAI had previously spotlighted Nscale when announcing plans for a Stargate-branded AI data center in Norway. Nscale committed $1 billion to the project, aiming to deploy 100,000 Nvidia graphics processing units (GPUs) at the site by 2027. This considerable investment demonstrates the scale required to support the intensive computational demands of advanced AI models.

This rapid ascent is remarkable, considering that Nscale was still part of Arkon Energy when OpenAI ignited the generative AI revolution with ChatGPT in late 2022. Originally focused on providing infrastructure for cryptocurrency mining after its founding in 2021, Nscale was spun out to capitalize on the accelerating demand for data centers capable of handling complex AI workloads. The strategic shift highlights the adaptability and foresight required to succeed in the fast-paced tech landscape.

Similar to CoreWeave, which went public this year and now has a substantial market capitalization, Nscale is integrating data center space, power, and a massive deployment of GPUs with its own proprietary software to deliver end-to-end AI infrastructure solutions. This vertically integrated approach aims to provide a seamless and efficient service for AI developers and researchers, reducing the complexity often associated with managing large-scale AI deployments.

CoreWeave, a major player also with roots in crypto, supplies infrastructure to Microsoft, Google, Nvidia, and OpenAI, and built its initial GPU fleet for ethereum mining before transitioning to AI. This transition is a testament to the transferable value of high-performance computing resources and the foresight to recognize emerging market opportunities.

While Nscale has not commented on the recent announcements, CEO Josh Payne emphasized the company’s focus on overcoming two key challenges in the European market: the scarcity of computing capacity and market fragmentation.

“What the continent needs is large AI infrastructure projects deploying compute [power],” Payne stated in July, following the OpenAI announcement for the Norway buildout. “The ecosystem can consume from the project to build AI products, to generate productivity growth and economic benefit.”

Payne added in a LinkedIn post that the agreement with Microsoft and Aker significies a “huge win for European-owned AI infrastructure.”

Europe is actively promoting the concept of “sovereign AI,” which emphasizes that data centers and AI workloads must be located and processed within European borders. Nscale is rapidly emerging as a key player in realizing the U.K.’s ambition to become a global leader in AI, partially through the U.K’s AI “action plan,” to reduce bureaucracy to bolster its domestic AI sector.

While Nscale is focused on the European market, many of its initial partners are large U.S. AI vendors, their recent announcements in conjunction with the visit President Donald Trump to the U.K. shows the global partnerships.

Microsoft underscored its commitment to the U.K. with a $15.5 billion investment in computing equipment. The software giant intends to collaborate with Nscale to build what will be the U.K.’s largest supercomputer in Loughton, Essex, signifying the growing importance of the U.K. as a hub for technological innovation.

The supercomputer will initially feature 23,040 Nvidia Blackwell GPUs, set for delivery in the first quarter of 2027, which will allow for an initial 50 megawatts of AI capacity, scalable to 90 megawatts, according to Nscale. This substantial investment demonstrates the level of computational power necessary to drive cutting-edge AI research and applications.

“No one can make that kind of capital investment unless they’ve got somebody already committed to spend the money once the work is complete, and that’s the role we’re playing,” Microsoft President Brad Smith said, signaling a strong vote of confidence in Nscale and its capabilities.

OpenAI also plans to introduce a U.K. version of Stargate in partnership with Nscale and Nvidia. OpenAI will deploy 8,000 GPUs in the project’s initial phase early next year, with the potential to increase capacity to roughly 31,000 GPUs over time. Stargate U.K. will operate across multiple sites, including Cobalt Park in Newcastle, a key area in the Northern English AI landscape.

Nvidia’s planned investment of up to £11 billion ($15 billion) with Nscale and CoreWeave aims to significantly enhance the U.K.’s AI infrastructure. This investment indicates the recognition of the potential for the U.K. in fostering innovation and advancement in the AI field. It also underscores the global competition for dominance in AI and the importance of infrastructure as a key enabler.

Nvidia CEO Jensen Huang revealed a £500 million ($683 million) equity investment in Nscale, further emphasizing the chipmaker’s commitment to the U.K. company.

“We convinced ourselves that Nscale could be a national champion for AI infrastructure in the U.K.,” Huang said at a press conference in London.

Nick Patience, AI practice lead at the Futurum Group, emphasized that Nscale is an essential piece to “Nvidia’s reach in the U.K. market and an acknowledgement by the government that it has to do something to get the AI infrastructure built here, which has been a long slog.”

Since coming out of stealth in May 2024, Nscale’s first public announcement came with a partner with UAE’s Open Innovation AI to deploy 30,000 GPUs. Around the same time, Nscale said it was acquiring Kontena, which was founded in 2018 and specialized in high-performance computing data centers. This strategic acquisition enhanced Nscale’s capabilities in providing robust infrastructure for demanding AI workloads.

The next month, Nscale announced an agreement with Asian telecom company Singtel to offer “GPU-as-a-Service (GPUaaS),” for customers in Europe and Southeast Asia. With infrastructure that previously relied on GPUs from Advanced Micro Devices, the startup now mainly uses Nvidia’s high-performance GPU offerings as the companies leader in the market today.

Nscale’s big financing landed in December, when the company said it raised $155 million in a round led by Sandton Capital Partners, with participation from Kestrel0x1, Blue Sky Capital Managers and Florence Capital.

Sandton co-founder Rael Nurick said in the press release that with its “unique vertically integrated approach, Nscale is building the hyperscale AI platform to power AI at scale.”

Nscale highlighted at the time that its AI data center pipeline reached 1.3 gigawatts, with a target of deploying 350,000 GPUs by 2027. These goals underscore the ambitious growth plans of the company and its focus on meeting the increasing demands of the AI market.

By comparison, CoreWeave said its portfolio consists of “about 2.2 gigawatts of capacity that’s coming online.” The company said in its IPO prospectus that its 32 data centers were running 250,000 GPUs.

These accomplishments in under 3 years, proves CEO Payne’s efforts. As he was serving as executive chairman of Arkon, he also served as operating chief at Australia’s Battery Future Acquisition Corp., which is “targeting critical battery minerals and related supply chains.”

He’s got a lot of work in front of him.

Building AI data centers with costly GPUs is a capital-intensive undertaking that has historically necessitated substantial debt financing. CoreWeave had raised a notable amount of debt in addition to raising equity financing before its IPO. This highlights the financial complexity associated with large-scale AI infrastructure projects.

Nscale was also trying to raise big investments earlier this year according to Bloomberg.

Nscale said in its equity fundraising in December, it “one of the largest Series As raised in U.K., European history.” The company aims to use funds to deploy 4,000 GPUs in Norway, to develop up to 180 megawatts of capacity in the company’s portfolio.

The aim, Payne said, was to deploy 50,000 GPUs by the end of 2025 and 150,000 by the end of next year.

“The key challenges that we see in the market is the significant increase in density at the GPU level,” he said. “This funding allows us to scale up materially” he said, and to become “one of the largest players in Europe.”