Microsoft has declined an option to more than double its Texas computing contract with UK-based AI infrastructure company Nscale, the Financial Times reported on 5 November, according to a Reuters dispatch. The option covered additional computing power at a data centre site where Microsoft already has an agreement with Nscale.
Key points
- The Financial Times reported that Microsoft declined an option to more than double its Texas contract.
- Nscale’s October 2025 agreement covers approximately 104,000 Nvidia GB300 GPUs at the Texas campus.
- Other Microsoft-Nscale contracts, including sites in Portugal and Norway, remain in place.
Microsoft passes on Texas expansion option
The reported decision concerns the option to enlarge Microsoft’s existing rental of computing power at the Texas site. The Financial Times attributed its account to people familiar with the matter, Reuters reported. Reuters said it could not immediately verify the report.
Microsoft has withdrawn from a different Nscale project before. AI Affairs reported its exit from Nscale’s Essex data centre deal ahead of a planned IPO. The Texas decision concerns an expansion option attached to an existing contract, rather than that Essex project.
Nscale’s October agreement and 700 MW option
Nscale’s October 2025 agreement with Microsoft covers approximately 104,000 Nvidia GB300 GPUs at its Texas campus, with deliveries scheduled in phases from Q3 2026, Global Banking & Finance Review reported, citing Nscale. The agreement also includes an option for an additional 700 MW of capacity from late 2027.
Microsoft and Nscale have other continuing contracts, including projects in Portugal and Norway, the publication reported. It described their ongoing contracts outside the rejected expansion as collectively worth tens of billions of dollars. Those agreements give the two companies a continuing commercial relationship beyond the Texas option.
Nscale’s other proposed computing deal
Nscale is also pursuing a separate potential customer agreement. AI Affairs reported talks with Anthropic over a potential $45 billion computing deal. Those talks concern a proposed transaction, while Microsoft’s decision relates to an option under an existing contract.
Nscale’s financing plans have drawn scrutiny alongside those customer negotiations. AI Affairs reported investor pushback on Nscale’s $30 billion IPO valuation.
