Microsoft Signs 1.35GW AI Campus Deal in West Virginia
▼ Summary
– Nscale and Microsoft have signed a letter of intent to deploy 1.35 gigawatts of AI compute capacity using approximately 430,000 next-generation NVIDIA Vera Rubin GPUs at a new West Virginia campus.
– The project will be built on the Monarch Compute Campus, which is described as the first state-certified AI microgrid in the US and has a scalable on-site power potential of over eight gigawatts.
– To power the campus independently and quickly, Nscale will deploy Caterpillar natural gas generators to achieve two gigawatts of on-site power by the first half of 2028, bypassing lengthy utility grid connections.
– The announcement follows Nscale’s recent $2 billion Series C funding round, which valued the company at $14.6 billion and is seen as preparation for a potential IPO as early as 2026.
– This deal deepens the existing commercial relationship between Nscale and Microsoft, positioning Nscale as one of the largest announced AI compute deployments in the US market if successfully executed.
A major new partnership will establish a significant hub for artificial intelligence computing in West Virginia. Microsoft has signed a letter of intent with infrastructure provider Nscale to secure 1.35 gigawatts of AI compute capacity at a new campus in Mason County. The agreement, unveiled at NVIDIA’s GTC 2026 conference, represents one of the largest planned AI deployments in the United States. It centers on the Monarch Compute Campus, a 2,250-acre site that Nscale describes as the nation’s first state-certified AI microgrid, with a potential on-site power footprint that could scale beyond eight gigawatts.
The framework combines a multi-year compute services agreement with a long-term data center lease. It covers the deployment of approximately 430,000 of NVIDIA’s next-generation Vera Rubin NVL72 GPUs, marking what Nscale calls the first large-scale commercial rollout of the Vera Rubin DSX AI Factory reference architecture. Deliveries are scheduled to begin in late 2027 and will be phased in across multiple stages. Nscale acquired the campus location by purchasing American Intelligence & Power Corporation, a move that facilitates this rapid development.
Powering such a massive operation quickly presented a fundamental challenge. The solution involves bypassing traditional utility grid connections, which can take years to develop. Instead, Nscale is partnering with Caterpillar to deploy natural gas generator sets, aiming to achieve two gigawatts of on-site power generation by the first half of 2028. This off-grid approach is designed to avoid placing strain on local electricity customers and protect ratepayers. The campus design does allow for a future connection to the grid, with the potential to export power back to it. To address environmental concerns, Nscale states it is pursuing carbon sequestration options available in West Virginia to offset emissions from the natural gas units.
The company also emphasizes the site’s efficient design, claiming it will use less water with no impact on municipal supplies even at full capacity. This focus reflects the heightened regulatory and community scrutiny that large-scale AI infrastructure projects now face when selecting locations. The Monarch deal expands an existing commercial relationship, as Microsoft is already a customer at Nscale’s data center in Narvik, Norway.
Leadership from all involved companies highlighted the strategic importance of the collaboration. Nscale’s CEO noted the partnership creates a foundation for innovation that can scale with the world’s most ambitious AI models. A Microsoft executive stated that such strategic collaborations are a key part of building a global infrastructure to deliver meaningful AI innovation to customers. An NVIDIA representative added that the deployment represents the industrial-scale infrastructure required to power the next wave of global innovation.
This announcement follows closely on a significant financial milestone for Nscale. Just one week prior, the UK-based company closed a $2 billion Series C funding round, valuing the firm at $14.6 billion. The round was led by Aker ASA and 8090 Industries, with participation from a notable list of investors including Citadel, Dell, Lenovo, Nokia, and NVIDIA itself. The involvement of advisors Goldman Sachs and JPMorgan is widely seen as preparation for a potential initial public offering, which the company’s CEO has suggested could occur as early as 2026.
Founded in 2024, Nscale has moved rapidly to build its operational footprint, which currently includes sites in Norway, the United Kingdom, and Texas. The Monarch acquisition and the Microsoft agreement, combined with its existing capacity, position the company as a major player in the AI infrastructure market. The Mason County site was selected in part for its advantageous geography, offering relatively low-latency connectivity to major hubs like Ashburn, Virginia, the world’s densest data center cluster, and Chicago, which is critical for performance-sensitive AI workloads.
(Source: The Next Web)
