Microsoft has decided not to proceed with a multibillion-dollar artificial intelligence data center deal with UK-based startup Nscale.

Financial Times, Reuters, Channel News Asia + 3 more · AI & Technology

5 Nov 20266 outlets

What it means

Microsoft had an existing contract with UK-based AI cloud startup to rent computing power at a Texas data center. Microsoft held an option to more than double that contract—a multibillion-dollar expansion—but has decided not to exercise it. This rejection of the deal is a significant blow to Nscale, which was reportedly planning a $35 billion IPO and is now left without the expected revenue boost.

Accuracy & sourcesGrounded

The claim stems from a Financial Times report, which is the named primary source and is a reputable outlet. Reuters and other major news organizations have independently confirmed the story, adding credibility. The reporting is close to the primary source (the FT's own reporting) and the details are consistent across multiple reputable secondary outlets.

How new

The story is genuinely new, published on November 5, 2026.

Past coverage

We reported on October 20, 2026 that Microsoft was pulling out of an Nscale data center deal; this latest story confirms the decision specifically on a multibillion-dollar expansion option, while also noting that Nscale had been in talks with Anthropic for a similar deal (covered on Oct 21, 2026).