By Conor McNevin
Publication Date: 2026-11-10 06:44:00
Microsoft has reportedly decided not to exercise an option to more than double its existing agreement with UK-based AI cloud provider Nscale for computing capacity at data centers located in Texas and West Virginia.
The potential extension, which was first reported by the Financial Times, would have been worth tens of billions of dollars to Nscale. While neither Microsoft nor Nscale have made any official statement to this effect, Reuters cited a person familiar with the matter and also reported that this decision was made several months ago, much before Nscale filed its IPO in September, and that this decision would not impact its existing Texas contract worth over US$ 100 billion.
Meanwhile, CNBC, also citing people familiar with the matter, reported that Microsoft was “shrinking its roster of neocloud partners” to focus on work with a few key suppliers and build out its own data centers. It also pointed to “rising borrowing costs” and “hefty debt loads” in…
