Microsoft Rejects Multibillion-Dollar Computing Expansion With Nscale
Microsoft declined an option to more than double its computing power lease with Nscale in Texas following a previous withdrawal from a UK project.
Microsoft rejected an option to more than double its existing agreement to rent computing power from Nscale at a data center in Ward County, Texas. The decision means the technology giant walked away from a potential deal worth tens of billions of dollars. This follows an earlier withdrawal by Microsoft from a $3 billion deal for computing capacity at Nscale's flagship facility in Loughton, Essex, United Kingdom, which was caused by power connection delays pushing supply dates into the 2030s.
The setback occurs as NScale Global Holdings Limited prepares for a United States initial public offering valued at approximately $35 billion. Despite the lost potential revenue in Texas, Nscale reported that its total backlog remains at $103 billion. However, the company faces significant financial pressure, reporting a net loss of $1 billion on $141 million in revenue for the first half of 2026.
Nscale, which is backed by Nvidia Inc., must now secure new customers for the Ward County site. The company continues to negotiate separate deals to provide AI computing power to other firms, including ongoing talks to expand capacity in West Virginia.
