UK's Nscale to supply Microsoft with 200,000 Nvidia AI chips

(Reuters) -Nscale will deploy around 200,000 Nvidia AI chips under an expanded agreement with Microsoft across its data centers in Europe and the U.S., the British artificial intelligence group said on Wednesday. The Nvidia-backed company did not disclose the financial terms, but the Financial Times reported it could generate up to $14 billion in revenue for the startup, based on a comparable contract. The agreement will be executed in collaboration with Dell Technologies. Microsoft did not immediately respond to a Reuters request for comment. Nscale also said its joint venture with Norway's Aker will supply Microsoft with around 52,000 Nvidia GPUs from its hyperscale AI campus in Narvik, Norway. AI-related infrastructure spending is expected to surpass $2.8 trillion through 2029, according to a Citigroup estimate, as the so-called hyperscalers including Microsoft, Meta and Alphabet make multi-billion-dollar investments to ease capacity constraints.  Nscale will begin supplying Nvidia graphics processing units to Microsoft via its data centers in Texas and Portugal starting next year, it said on Wednesday. The company also plans to expand its Texas operations over the coming years. The company in September raised $1.1 billion from investors, including Aker and Finland's Nokia, to help accelerate its data center buildout. (Reporting by Disha Mishra in Bengaluru; Additional reporting by Deborah Sophia; Editing by Harikrishnan Nair and Sriraj Kalluvila)

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