Market Chatter: Microsoft Declines Texas Data Center Contract Extension With Nscale, Tightening Data Center Oversight

11:13 AM EST, 11/05/2026 (MT Newswires) -- Microsoft (MSFT) declined to extend a contract at a Texas data center with Nscale ahead of the startup's planned initial public offering, Bloomberg reported Thursday, citing a person familiar with the matter. Under a deal struck late in 2025, Nscale agreed to provide Microsoft with 240 megawatts of computing capacity at the Texas site with the option to add 700 megawatts. The software giant on Thursday decided to not move forward with the site because the project was in need of regulatory approvals for an energy connection, the person reportedly said. Microsoft is tightening its oversight of some data center projects from Nebius Group (NBIS), IREN (IREN) and Nscale, as the neocloud companies deal with delays, regulatory issues and high costs, Bloomberg reported separately Thursday, citing people familiar with the matter. The company is stepping away from projects it believes are too risky and internally debating whether to agree to new neocloud deals, the report said, citing the people. Microsoft, Nscale, Nebius and IREN didn't immediately reply to requests for comment from MT Newswires. (Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.) Price: 537.73, Change: -18.07, Percent Change: -3.25