Microsoft is tightening oversight of data-centre projects run by Nebius, IREN and Nscale and will not take an option to more than double its Nscale agreement in Texas, Reuters reported on 5 November. Reuters attributed the broader review to a Bloomberg News report citing people familiar with the matter. Neocloud providers build data centres and rent out computing capacity. The Texas decision concerns an option for more capacity under an existing agreement.
Key points
- Microsoft is reviewing projects involving Nebius, IREN and Nscale, Bloomberg News reported.
- Microsoft will not take an option to more than double its Nscale agreement at a Texas data centre.
- Microsoft also withdrew from a separate Nscale project in Essex after delays to its power connection.
- Nebius and IREN shares fell more than 13 per cent in afternoon trading; CoreWeave fell 11 per cent.
Microsoft reviews Nebius, IREN and Nscale projects
Microsoft is moving away from projects it considers risky and is discussing internally whether to enter further neocloud agreements, Bloomberg News reported. The company is concentrating on expanding its own data centres rather than adding such deals, although it has not ruled out further agreements.
The review covers projects involving three named providers: Nebius, IREN and Nscale. The reported discussion about new agreements is separate from the decisions concerning Nscale’s Texas and Essex sites. Microsoft already has an agreement for capacity at the Texas data centre; the decision reported on 5 November concerns an option to increase the amount it rents there.
Microsoft, Nebius, IREN and Nscale did not immediately respond to requests for comment, Reuters reported.
Nscale loses the Texas expansion option
Microsoft will not exercise its option to rent additional computing power at Nscale’s Texas data centre. Taking that option would have more than doubled the size of the existing agreement. AI Affairs previously reported Microsoft’s decision on the Texas expansion.
Texas also faces a potential change in the rules for data-centre development. Gina Hinojosa won the state’s governor’s race and has said she would ban new projects until lawmakers pass rules for the industry, Reuters reported. The Texas decision described by Reuters concerns capacity at an existing Nscale site.
The other Nscale decision concerns Loughton, Essex. Microsoft withdrew weeks ago from a deal to anchor the company’s data centre there after delays to the site’s power connection pushed the expected supply into the 2030s. AI Affairs reported the Essex departure ahead of Nscale’s planned IPO.
Nebius and IREN fall more than 13 per cent
Shares in several neocloud companies fell during afternoon trading on 5 November. Nebius and IREN were each down more than 13 per cent, while CoreWeave was down 11 per cent. CoreWeave was among the companies whose shares fell, though the reported Microsoft project review named Nebius, IREN and Nscale.
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