The Stargate project was launched amidst much fanfare in the US last year, and since then it has also announced multiple projects in other countries, such as UAE, UK, Norway, and Argentina. But now reports are coming in, that suggest that it might be recalibrating strategy in some projects, and putting planned development on hold in others.
Let’s begin with Norway, where CNBC reports that OpenAI has pulled back from the Stargate Norway data center deal, and Microsoft is taking over. The decision affects a planned 230 MW Stargate Norway facility in Narvik, where OpenAI had previously explored becoming an early customer. Bloomberg also reports that Microsoft is expected to take over the capacity that had been under discussion, while OpenAI is in talks to access computing resources through Microsoft.
Readers would recall that Stargate Norway, its first AI data center initiative in Europe, and the third major Stargate project launched since its debut in the United States, and its second iteration in the Middle East under the project name Stargate UAE, was launched in August 2025. OpenAI had identified the Narvik site as part of its broader “Stargate” initiative to secure large-scale computing infrastructure. The project is being developed by Nscale, which has been seeking long-term tenants as it expands data center operations in Europe.
Stargate Norway: scaling back or recalibrating strategy?
But now, an OpenAI spokesperson declined to specify to CNBC how much capacity had been under consideration, but confirmed that the company is now pursuing access through Microsoft instead. The spokesperson also pointed to OpenAI’s earlier disclosure that it had committed to purchasing US$ 250 billion in services from Azure, Microsoft’s cloud computing division, highlighting the scale of the companies’ existing commercial relationship.
The spokesperson described that structure as more financially efficient because it falls under OpenAI’s existing contractual commitments by saying, “We are moving ahead with our plans in Norway, Microsoft is an important partner in our network and we will work with them to access compute in Norway just as we already do in other parts of the world.”
Jon Tinter, president of business development and ventures at Microsoft, said in a statement, “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.”
OpenAI had discussed leasing roughly half of the facility’s total capacity, however these talks ultimately ended without an agreement after the companies failed to reach terms on an offtake arrangement, after which Microsoft moved to secure the capacity. For Microsoft, the Narvik expansion reflects continued demand for artificial intelligence infrastructure in Europe, where cloud providers are competing for power, land and computing capacity to support rising usage. The change comes as OpenAI moderates expectations around infrastructure spending while continuing to secure computing resources needed to train and run its AI systems.
Growing importance of Microsoft in OpenAI’s plans
The shift underscores Microsoft’s central role in OpenAI’s infrastructure strategy which appears to rely heavily on its existing partnership with Microsoft to secure capacity as global competition for AI computing resources intensifies.
Microsoft and OpenAI had established their strategic partnership in 2019 and extended through 2030, centered on deep integration across model access, infrastructure, and commercialization, with Microsoft serving as both a strategic investor and primary cloud provider. Under the agreement, Microsoft retains rights to OpenAI intellectual property, including AI models and related infrastructure for deployment in its products such as Copilot, while OpenAI’s API remains exclusively available on Azure and through the Azure OpenAI Service, effectively anchoring production inference and enterprise distribution within Microsoft’s cloud ecosystem.
Mutual revenue-sharing linked to model usage and product deployment continues through Microsoft’s investments that support OpenAI’s scaling efforts. Microsoft also holds the right of first refusal, while OpenAI is permitted to provide new capacity for expanding additional infrastructure primarily in research and training. The partnership extends to joint initiatives on large-scale AI infrastructure programs, including Stargate, reinforcing shared commitments to long-term compute expansion and model development.
Other Star(gate)s in the galaxy
The Norway decision follows a similar move in the United Kingdom, where according to a report by the BBC, OpenAI recently halted another data center project due to energy costs and regulations, suggesting the company is reassessing how it finances and sources large-scale compute capacity in Europe.
Oracle and OpenAI also cancelled plans to expand a major artificial intelligence data center in Abilene, Texas. The expansion was part of the Stargate initiative, a massive project valued at up to US$ 500 billion and designed to generate 10 GW of computing power.
In the Middle East, after US president Donald Trump made threats to target Iran’s electrical infrastructure, the Islamic Revolutionary Guard Corps (IRGC) stated it will target Stargate UAE campus in Abu Dhabi which was launched in May 2025, under a combined partnership between G42, OpenAI, Oracle, NVIDIA, SoftBank Group and Cisco. With a fragile ceasefire in place, an uneasy calm has descended over the region.
In October 2025, OpenAI had announced yet another Stargate AI data center project in Argentina. The project will be developed at an investment of a whopping US$ 25 billion, the largest such digital infrastructure investment in Argentina so far. The government of Argentina has signed a landmark agreement with OpenAI, and Argentine-U.S. firm Sur Energy to construct a large-scale AI data center in Patagonia. But, the Stargate Argentina project is yet to take off.