Microsoft declines Nscale compute expansion worth tens of billions

Nov 5, 2026
Microsoft will not exercise an option to more than double its AI computing agreement with Nscale at a Texas data center. The existing contract remains unchanged.

Microsoft will not exercise an option to more than double its computing agreement with Nscale at a Texas data center, a person familiar with the matter told Reuters. The Financial Times first reported the decision on November 5, 2026. The potential extension would have been worth tens of billions of dollars to Nscale.

According to the person, Microsoft made the decision several months ago, before Nscale filed for an initial public offering in September. The existing Texas contract remains unchanged, and the decision does not affect the roughly $103 billion in total contract value disclosed in Nscale's filing.

Microsoft and Nscale agreed last year to deploy about 200,000 Nvidia AI chips across data centers in the United States and Europe. The person said Nscale is discussing the remaining capacity at the Texas facility with several major customers. Weeks earlier, Microsoft pulled out of anchoring Nscale’s Loughton, England, project after power connection delays.

We hope you enjoyed this article

Consider subscribing to one of our newsletters like Silicon Brief or Daily AI Brief.

Also, consider following us on social media:

AI Chips & Datacenters AI Brief AI Brief (X)
Free newsletter

Silicon Brief

Weekly coverage of AI hardware developments including chips, GPUs, cloud platforms, and data center technology.

Guide
Private AI chip companies, by latest reported valuation

Private AI chip companies, by latest reported valuation

Private companies building AI compute silicon (the chips that run AI workloads), shown with each company's most recent reported or disclosed valuation. The figures are measured on different dates and bases, so this is a snapshot, not a live ranking or a like-for-like comparison.

Industry analysis

2025 Global Business Services Agenda: Gen AI Takes Center Stage

The Hackett Group

This industry analysis by The Hackett Group explores the transformative impact of generative artificial intelligence (Gen AI) on global business services (GBS) in 2025. The study highlights the shift from exploration to acceleration of Gen AI initiatives, with 89% of executives advancing these projects to improve customer satisfaction, innovate products, and reduce costs. The report also discusses the challenges and strategies for successful Gen AI adoption, emphasizing the need for a technology-enabled operating model and the importance of reskilling the workforce.

Read more

You may also like

Free, six days a week

Daily AI Brief: the AI news that matters, in your inbox.