Microsoft Steps Into 1.5K-Worker Arctic Data Center Leveraging 3¢-4¢ Hydropower
MSFT•Microsoft will replace OpenAI in leasing capacity at Nscale’s Arctic data center in Narvik, Norway, where staffing will rise from 350 to at least 1,500 as the build accelerates. The facility taps 3–4¢/kWh hydropower and subzero temperatures to cut cooling costs for Microsoft’s AI infrastructure.
1. Microsoft Replaces OpenAI in Nscale Project
Microsoft will step in to lease capacity at Nscale’s Narvik data center after OpenAI delayed formal contracts, integrating the facility into its AI infrastructure under existing agreements. The move follows the April rebranding of the site from Stargate Norway when OpenAI scaled back participation, leaving Microsoft as primary partner.
2. Strategic Arctic Location
The Narvik site sits above the Arctic Circle in northern Norway, offering a climate that naturally aids chip cooling and a remote yet accessible fjord valley for infrastructure. Its position as Europe’s northernmost data center underscores Microsoft’s push into extreme environments for AI deployments.
3. Cheap Hydropower Supports AI Operations
Nscale has secured access to roughly a gigawatt of unused hydropower at 3¢–4¢ per kilowatt-hour, undercutting the European average of 10¢. Nearby dams channel gravitational energy to the site, enabling Microsoft to run power-hungry AI servers with reduced electricity expenses.
4. Workforce and Construction Scale
Construction on the sprawling metal-and-rock complex has grown from 350 workers on site to a projected headcount of 1,500 as the build accelerates. The facility is among the largest AI data-center projects in Europe and signals Microsoft’s commitment to expanding compute capabilities.
