Microsoft declines option to more than double Nscale's Texas computing contract
Microsoft will not take up an option to more than double the computing power it rents from UK-based AI cloud firm Nscale at a Texas data centre, the Financial Times reported. Nscale's existing Texas contract is unaffected, but the news follows Microsoft's exit from the Loughton project ahead of Nscale's planned New York IPO.
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The story, neutrally told
Mixed · 2Microsoft has declined an option to more than double the size of its existing contract with AI cloud provider Nscale to rent computing power at a data centre site in Texas, the Financial Times reported on Thursday 5 November, citing people familiar with the matter. CNAN “Microsoft has rejected an option to more than double the size of its existing contract with Nscale to rent computing power at a data center site in Texas” Read at CNA ↗ City A.M.RC “The US tech giant has declined an option to more than double the computing capacity it rents from Nscale at a site in Texas” Read at City A.M. ↗ Centre · 1Reuters, in copy carried by CNA, said it could not immediately verify the FT report; a later CNA article quoted an unnamed person familiar with the matter confirming that Microsoft will not exercise the option. CNAN “Reuters could not immediately verify the report.” Read at CNA ↗ CNAN “Microsoft will not exercise an option to more than double the size of its existing agreement with AI cloud provider Nscale” Read at CNA ↗ Mixed · 2The FT said the extension would have been worth tens of billions of dollars to Nscale. City A.M. reported that under an October 2025 agreement Microsoft committed to about 240 megawatts at Nscale's Ward County site in Texas, and that the option covered roughly 500 megawatts more. CNAN “a potential deal extension would have been worth tens of billions of dollars for Nscale” Read at CNA ↗ City A.M.RC “Microsoft committed to renting around 240 megawatts of computing capacity at Nscale’s Ward County development in Texas, with the option to take significantly more.” Read at City A.M. ↗
Centre · 1The source told Reuters the decision was made several months ago, before Nscale filed for its IPO in September, and that the existing Texas contract is not affected. The source also said Nscale's total contract value of about $103 billion, as disclosed in the IPO filing, is unchanged, and that Nscale was already talking to several major customers about the rest of the Texas capacity. CNAN “Microsoft's decision to not expand the contract was made several months ago, before Nscale filed for its IPO in September”“Nscale was already in discussions with several major customers for the rest of the data center capacity in Texas” Read at CNA ↗ Right · 1City A.M. likewise said the existing agreement remains intact and the $103bn backlog is unaffected, though it said the decision removes a potentially lucrative source of extra revenue. City A.M.RC “The decision does not affect its reported $103bn backlog of contracted future business, although it removes a potentially lucrative source of additional revenue.” Read at City A.M. ↗ Centre · 1Nscale's IPO filing said it signed statements of work with Microsoft worth up to about $43.8 billion through December 2033, excluding optional extensions, between September 2025 and April 2026. The companies struck a deal last year for Nscale to deploy around 200,000 Nvidia AI chips for Microsoft across data centres in Europe and the US. CNAN “between September 2025 and April 2026 it signed statements of work with Microsoft worth up to about $43.8 billion through December 2033, excluding optional extensions”“around 200,000 Nvidia AI chips under an expanded agreement with Microsoft” Read at CNA ↗
Mixed · 2The news comes weeks after Microsoft pulled out of a deal to anchor Nscale's flagship £2bn Loughton, Essex data centre, after power connection delays pushed its expected supply date into the 2030s. City A.M. said UK Power Networks reportedly indicated grid capacity may not be available until the early to mid-2030s, and that Microsoft said it remained committed to its wider partnership with Nscale. CNAN “Microsoft pulled out of a deal to anchor Nscale's flagship data center project in Loughton, Essex, after power connection delays pushed its expected supply date into the 2030s” Read at CNA ↗ City A.M.RC “maintained that it remained committed to its wider partnership with Nscale” Read at City A.M. ↗ Right · 1City A.M. said Nscale is targeting a valuation of up to $35bn in a New York listing, against about $14.6bn in an earlier funding round this year, and reported a $1bn net loss on $141m of revenue in the first half of 2026, with much of the loss attributed to non-cash charges. City A.M.RC “Nscale is targeting a valuation of as much as $35bn in its planned New York listing, over double the roughly $14.6bn valuation”“reported a $1bn net loss on revenue of just $141m in the first half of 2026” Read at City A.M. ↗ Mixed · 2Nscale has a deal worth around $45bn to supply Anthropic from its West Virginia campus and is reportedly negotiating a second of similar size; City A.M. said the West Virginia project has also faced construction delays and local opposition. Microsoft and Nscale did not respond to Reuters' request for comment outside business hours. City A.M.RC “Nscale has already secured a deal worth around $45bn to supply Anthropic with computing power from its West Virginia campus” Read at City A.M. ↗ CNAN “Microsoft and Nscale did not respond to a request for comment outside business hours.” Read at CNA ↗
Every sentence links to the reporting it rests on. The pill in front of each says where its sources sit: Left, Centre or Right when one side supplies at least half of them, Mixed when they are evenly split. The number is how many outlets it cites.
Left0 outlets
No left outlet in our sources has covered this story yet.
Centre1 outlet
- Framing
- Short agency-style business reports relaying the FT scoop, then adding a source's account that the decision is old and has limited financial impact.
- Emphasis
- Reassuring detail from the source: timing before the IPO filing, existing contract unaffected, $103bn total unchanged, other customers in talks.
- Leaves out or plays down
- Gives no megawatt figures, Nscale's losses or valuation target, or the Anthropic project's delays.
Right1 outlet
- Framing
- Frames the news as a fresh setback for a British AI 'darling' before its IPO, putting it in a pattern of difficulties turning contracts into data centres.
- Emphasis
- IPO valuation ambitions, heavy losses against small revenue, the Loughton withdrawal, and other project delays.
- Leaves out or plays down
- Does not report the source's claim that the decision was taken months ago, before the IPO filing.
- Charged language
- “fresh blow”“British AI darling”“another setback”“awkward moment”
What every side reports
- Microsoft declined an option to more than double its Texas computing contract with Nscale, as first reported by the Financial Times.
- Nscale's existing Texas contract with Microsoft remains in place.
- Nscale's reported $103bn contract backlog is unaffected.
- Microsoft earlier pulled out of Nscale's Loughton, Essex project over power delays.
- Nscale is in talks with other customers for the available Texas capacity.
Where accounts differ
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What the decision means for Nscale
- Centre
- CNA, via a Reuters source, stresses the decision was made months ago, before the September IPO filing, and has no impact on total contract value.
- Right
- City A.M. calls it a 'fresh blow' and 'another setback' that raises 'fresh questions' over Nscale's expansion plans ahead of its IPO.
Microsoft organisation
Microsoft did not respond to Reuters' request for comment on the Texas decision; on the earlier Loughton withdrawal it reportedly said it remained committed to its wider partnership with Nscale.
“Microsoft and Nscale did not respond to a request for comment outside business hours.” — CNA
“maintained that it remained committed to its wider partnership with Nscale” — City A.M.
Nscale organisation
Nscale did not comment. An unnamed source said it was already in talks with several major customers for the remaining Texas capacity and that its total contract value is unchanged; it is pursuing a New York IPO at up to $35bn.
“Nscale was already in discussions with several major customers for the rest of the data center capacity in Texas” — CNA
“Nscale is targeting a valuation of as much as $35bn in its planned New York listing” — City A.M.
Left0 articles
No coverage yet.
Centre2 articles
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CNAN ·
Microsoft rejects multibillion-dollar AI deal with UK's Nscale, FT reports
Neutral Brief flash relaying the FT report and noting it was unverified.
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CNAN ·
Microsoft will not expand Texas data center deal with UK's Nscale, source says
Neutral Reuters-style report built on an anonymous source, giving context that plays down the financial impact.
Right1 article
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Microsoft deals fresh blow to Nscale’s $35bn IPO ambitions
Critical Presents the decision as another blow to Nscale's IPO prospects and a test of its ability to deliver projects.
- 5 Nov 05:12 First CNAN Microsoft rejects multibillion-dollar AI deal with UK's Nscale, FT reports
- 5 Nov 05:12 First CNAN Microsoft will not expand Texas data center deal with UK's Nscale, source says
- 5 Nov 13:16 +8h 4m City A.M.RC Microsoft deals fresh blow to Nscale’s $35bn IPO ambitions
Times are when each article was published, or when we first saw it if the outlet gave no time.
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