Microsoft says ‘big No’ to UK’s most-valuable startup Nscale; as Texas datacentre troubles haunt
The update comes as a fresh setback to the UK’s most valuable AI start-up as it prepares for a potential $35 billion stock market listing. Nscale had secured a deal with Microsoft in October 2025 to lease around 240MW of computing capacity at a data centre site in Ward County, Texas.
The US software giant has decided not to take up an option to lease additional computing capacity worth tens of billions of dollars, according to people familiar with the matter cited by the Financial Times (FT). Microsoft has now decided against taking up that option, according to people familiar with the matter. Microsoft has rejected an option to expand its existing deal with Nscale for computing power at a Texas data centre. As per the report, the decision could force Nscale to find new customers for the site or risk losing billions of dollars in potential future revenue. The agreement also included an option for Microsoft to lease additional capacity. Nscale later clarified to the FT that the option was closer to 500MW and related to additional capacity at its own site.