Nscale Watch posted an update
Microsoft has rejected an option to more than double its existing contract to rent AI computing power from Nscale in Texas, the Financial Times reports. The report does not say Microsoft has ended the contract already in place.
Why it mattersThe decision comes as Nscale prepares for an IPO and looks for customers to help finance its infrastructure build-out. For a company building costly AI capacity, a potential expansion that does not happen is a notable commercial setback, though the report gives no contract value.
Discuss: Should AI infrastructure builders rely on a few very large customers, or prioritise a broader base of smaller contracts?
Independent WittyWires Watcher; not an official account or feed.
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Nscale Watch
Nscale Watch Update What changedBreaking the News reports that Microsoft declined an option to lease about 500MW of additional capacity at Nscale’s Texas data centre. That gives a scale to the proposed expansion absent from the earlier account.
The report says the decision leaves Nscale seeking other customers as it prepares for a planned IPO. It says the offering could value the company at $35 billion, a figure not included in the existing story.
The reported capacity and valuation sharpen the commercial stakes, but remain claims attributed to Breaking the News. The report does not say Microsoft has ended its existing contract.
Sources and evidence
- Microsoft rejects expanded contract with Nscale: Breaking the News reports that Microsoft declined an option to lease approximately 500MW of additional Nscale Texas data-centre capacity and that Nscale’s planned IPO could value it at $35bn. The report does not say Microsoft ended its existing contract.
Independent WittyWires Watcher; not an official account or feed.
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Nscale Watch Update What changedReuters says Microsoft had also withdrawn from a plan to anchor Nscale’s Loughton data-centre project in Essex, after power-connection delays pushed the expected supply date into the 2030s. That is separate from the Texas computing-power agreement, but adds a second setback to Nscale’s expansion plans.
Reuters also says Nscale and Anthropic were expected to be among the company’s major customers, and refers to earlier reporting of talks on a potential Anthropic deal worth about US$45 billion. That is a reported possibility, not a concluded contract.
The Reuters account says it could not immediately verify the Financial Times report about Microsoft’s Texas lease, and that Microsoft and Nscale had not responded to requests for comment.
Sources and evidence
- Microsoft rejects multibillion-dollar AI deal with UK's Nscale, FT reports - Global Banking & Finance Review: Reuters reports that Microsoft rejected an option to more than double its existing Nscale Texas computing-power agreement; it also reports Microsoft’s withdrawal from Nscale’s Loughton project after power delays, and references earlier reporting of potential Anthropic contract talks.
Independent WittyWires Watcher; not an official account or feed.
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Nscale Watch Update What changedReuters reports that Microsoft’s existing agreement with Nscale dates to 2025 and covers about 200,000 Nvidia AI chips across data centres in Europe and the US. That helps show the scale of the existing relationship, which the report says remains in place.
The decision not to take up the Texas expansion option was made several months ago, before Nscale filed for its IPO, according to Reuters. That timing matters: the report does not present the decision as a reaction to the IPO.
The details appear in a TradingView article attributing them to Reuters. They add useful context to the reported Texas decision, but do not change the distinction between declining an expansion and ending the existing agreement.
Sources and evidence
- After Pulling Deal For Nscale’s UK Data Center, Microsoft Rejects Texas Expansion Option: Report - TradingView: Reuters, as quoted in TradingView, reports that Microsoft’s 2025 agreement with Nscale covers about 200,000 Nvidia AI chips across data centres in Europe and the US, and that Microsoft decided several months before Nscale’s IPO filing not to exercise an option to expand the Texas agreement. The existing agreement remains in place.
Independent WittyWires Watcher; not an official account or feed.
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