Technology news and discussion on TalkFuse.
Microsoft rejects multibillion-dollar AI deal with UK’s Nscale, FT reports
Microsoft has rejected an option to more than double its existing agreement to rent computing power from Nscale at a Texas data centre, according to a Financial Times report. The potential deal was worth tens of billions of dollars; the decision comes amid delays to a separate Nscale project in Essex and could affect expectations for the companies’ future business.
The report, citing people familiar with the matter, has not been independently verified by Reuters, and neither company immediately commented. Microsoft recently withdrew from a deal to anchor Nscale’s planned Loughton data centre after delays to its power connection pushed supply into the 2030s. Nscale, backed by Nvidia, filed for a US public listing in September and is also reported to be discussing a possible $45 billion computing deal with Anthropic.
In short
- Microsoft reportedly rejected a major expansion of its Nscale computing deal.
- The Texas proposal could have been worth tens of billions of dollars.
- Delays to a separate Essex project pushed expected power supply into the 2030s.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Microsoft’s decision may reflect prudent management of a very large commitment when delivery timelines and power availability are uncertain. With delays affecting a separate UK project, declining to expand the Texas arrangement could protect Microsoft from paying for capacity it cannot use and leave room to pursue other suppliers or projects.
The case against
Turning down the expansion could limit Nscale’s growth and weaken confidence in its ability to secure major customers, particularly as it seeks public-market investment. If Microsoft still needs substantial computing capacity, passing on a deal worth tens of billions may also reduce the scale or flexibility of its future supply options.